Code On Social Security 2020

Finally, on 28th September 2020, the Code on Social Security 2020 received Presidential Assent. The new code replaces the erstwhile Code on Social Security 2019. Interestingly, the Code on Social Security 2020 subsumes nine regulations relating to employee benefits, retirement, and social security. The present article briefly highlights the key points of the newly introduced Code On Social Security 2020.

List of regulations subsumed in Code On Social Security 2020

Following nine regulations are consolidated into the Code On Social Security 2020-

The Employees’ State Insurance Act, 1948.
The Employees’ Compensation Act, 1923.
The Employees’ Provident Funds & Miscellaneous Provisions Act, 1952.
The Payment of Gratuity Act, 1972.
The Maternity Benefit Act, 1961.
The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959.
The Building & Other Construction Workers Welfare Cess Act, 1996.
The Cine Workers Welfare Fund Act, 1981.
The Unorganized Workers’ Social Security Act, 2008.

Applicability of Code On Social Security 2020

The Code On Social Security 2020 specifies different applicable thresholds for the scheme. Some are illustrated hereunder-

Particulars	Applicability
Code on Social Security	Any establishment subject to threshold limit to be notified.
Employees’ Provident Fund	An establishment having twenty or more employees.
Employees’ State Insurance Corporation	An establishment having ten or more person other than a seasonal factory. An establishment with even a single employee carrying on hazardous/ life threatening occupation.
Gratuity	Every mine, factory, plantation, oilfield, port or railway company; and Every shop/ establishment having ten or more employees.
Maternity benefit	Every factory, mine, plantation and any government establishment; and Every shop/ establishment having ten or more employees.
Social Security for Unorganized Workers’	Gig worker, Unorganized sector/ worker, platform worker.
Social Security & Cess in respect of Building & other Construction Workers	Every establishment falling under the building & other construction work.

Notably, all the eligible establishments are liable to register under the Code On Social Security 2020 unless they are already registered under any other law.

Salient features of Code On Social Security 2020

Some of the salient features of the Code are highlighted hereunder-

Formation of various bodies (i.e. Social Security Organizations) under the Code.
Employees’ State Insurance Corporation-
- Code permits voluntary registration under the Employees’ State Insurance.
- The Employees’ State Insurance Fund shall be used for the following purpose only-
  - Payment of benefits and provision of the medical treatment to an insured person.
  - Establishment/ maintenance of hospitals/ dispensaries and provision of medical and other ancillary services for the insured person.
  - Payment of fees/ allowance to the members of the corporation and committee members.
  - Meeting the audit cost, employees’ insurance court cost, expenditure for improvement of the health and welfare of the insured persons etc.
  - Payment of salaries and other office expenses of the corporation.
  - Payment of sum under any contract or decree.
- The employer shall pay in respect of each and every employee (whether directly employed by him or by the contractor) both the employee’s as well as the employer’s contribution.
- The employer/ contractor is not entitled to deduct the employer’s contribution from the wages payable to an employee.
Social security for Platform Workers, Unorganized Workers and Gig Workers-
- The Central Government will notify suitable welfare scheme for platform workers, gig workers and unorganized workers on a matter like old age protection; life and disability cover; education; health and maternity benefits, etc.
- The State Government will notify suitable welfare scheme for unorganized workers on a matter like old age homes; housing; provident fund; employment injury benefits; education schemes for children, etc.
- Every platform workers, gig workers and unorganized workers are required to obtain registration on fulfilment of following conditions-
  - The worker has completed sixteen years of age or any other prescribed age; and
  - The worker has submitted a self-declaration containing all the information prescribed by the Central Government.
Maternity benefits-
- - Every woman shall be eligible for payment of maternity benefits at the rate of an average daily wage during the period of actual absence.
  - A woman is eligible for a maximum period of twenty-six weeks of maternity benefits. Whereas, the maximum period of maternity benefits for a woman having two or more surviving children shall be twelve weeks.

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Frequently Asked Questions

Common questions about Code on Social Security 2020 Overview and Applicability.

The Code on Social Security 2020 is a new legislation that consolidates and subsumes nine existing regulations related to employee benefits, retirement, and social security into a single code. It replaces the erstwhile Code on Social Security 2019 and aims to streamline the provisions related to workers' welfare and social security.

The nine regulations that are consolidated into the Code on Social Security 2020 are: The Employees' State Insurance Act, 1948, The Employees' Compensation Act, 1923, The Employees' Provident Funds & Miscellaneous Provisions Act, 1952, The Payment of Gratuity Act, 1972, The Maternity Benefit Act, 1961, The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959, The Building & Other Construction Workers Welfare Cess Act, 1996, The Cine Workers Welfare Fund Act, 1981, and The Unorganized Workers' Social Security Act, 2008.

The Code on Social Security 2020 specifies different applicability thresholds for various schemes. For instance, the Employees' Provident Fund applies to establishments with 20 or more employees, while the Employees' State Insurance Corporation applies to establishments with 10 or more persons (or even one employee for hazardous occupations). The maternity benefit and gratuity provisions apply to establishments with 10 or more employees.

The Code mandates the Central Government to notify suitable welfare schemes for gig workers, platform workers, and unorganized workers, covering aspects like old age protection, life and disability cover, education, health, and maternity benefits. It also requires these workers to register and fulfill certain conditions, such as attaining a prescribed age and submitting a self-declaration.

Under the Code on Social Security 2020, every woman is eligible for maternity benefits at the rate of her average daily wage for a maximum period of 26 weeks. For women with two or more surviving children, the maximum period is 12 weeks. The code aims to provide comprehensive maternity benefits to eligible women employees.

The Code permits voluntary registration under the Employees' State Insurance and specifies that the Employees' State Insurance Fund shall be used solely for payment of benefits, provision of medical treatment, establishment of hospitals and dispensaries, payment of fees and allowances to members, meeting audit costs, and payment of salaries and other office expenses of the corporation.

Under the Code, employers are required to pay both the employee's and employer's contributions towards the Employees' State Insurance for each employee, whether directly employed or through a contractor. Employers are not entitled to deduct the employer's contribution from the wages payable to an employee.

The Code on Social Security 2020 provides for the formation of various Social Security Organizations to implement and oversee the various provisions and schemes under the Code. These organizations are responsible for ensuring the effective implementation of social security measures for workers across different sectors.

The Code mandates that all eligible establishments, unless already registered under any other law, are required to register under the Code on Social Security 2020. This registration process aims to ensure compliance and effective implementation of the social security provisions across various sectors and establishments.

The primary objectives of the Code on Social Security 2020 are to consolidate and streamline various existing laws related to workers' welfare and social security, extend coverage to unorganized and gig workers, and provide a comprehensive framework for the implementation and regulation of social security measures across different sectors and establishments.