OVERVIEW OF THE SOCIAL SECURITY CODE, 2020

1. INTRO: Social security is a fundamental aspect of a welfare state. Social security is a measure to
protect an individual against such economic and social distress. It encompasses various schemes,
including health and unemployment insurance, family allowances, provident funds, pensions, and
widows’ and survivors’ allowances. According to Articles 22 and 25 of the Universal Declaration of
Human Rights, access to Social Security is a basic right.

2. THE COMING UP OF THE CODE:

The Second National Commission on Labour, which submitted its Report in June 2002, had
recommended that the existing set of labor laws relating to social security should be grouped into a
single Social Security Code. The code on Social Security was enacted by the Parliament on September
23, 2020, with the objective of ensuring maximum social security coverage to the workforce across
the labor sector.

3. The Labour Code on Social Security & Welfare subsumes the following Labour Acts:

The New Code subsumes the following Acts: Payment of Gratuity Act, 1972, Employees’ Provident
Funds and Miscellaneous Provisions Act, 1952, Employees’ Compensation Act, 1923; Workers Cess
Act, 1996, Cine Workers Welfare Fund Act, 1981, Maternity Benefit Act, 1961; Building and Other
Construction, Employees’ State Insurance Act, 1948 and Unorganized Workers’ Social Security Act,
2008.

4. Applicability of the code: The Code applies to everyone on wages in an establishment, irrespective
of occupation. An attempt has been made to ‘Universalise’ the applicability, hence the Code is
Applicable to all ‘entities’ and all ‘workers’. Schedule – I provides for exclusions: i.e., entities/workers
who will be excluded. Regular Government servants will be excluded (who are covered under CCS
Rules), however, contractual employees even of the Government are included. Unorganized sector,
unorganized workers, gig workers, and platform workers are also included.

5. Key features of the Act:

1 Definition of Social Security

The Code on Social Security, 2020 has defined Social Security in the following way – “Social Security
means the measures of protection afforded to employees, unorganized workers, gig workers, and
platform workers, to ensure access to health care and to provide income security, particularly in the
cases of old age, unemployment, sickness, invalidity, work injury, maternity or loss of a breadwinner
by means of rights conferred on them and schemes framed, under this Code.

2. BENEFITS TO UNORGANISED WORKER, GIG WORKERS, AND PLATFORM WORKERS As there was
no specific legislation for the unorganized workers, they cannot claim significant benefits like
minimum wages, hours of work, overtime, leave, etc. The new code introduced the same
opportunities and protections which is given to other employees (government employees and
private sector employees) under various labor laws in India. The Code provides the right to the
Central Government and State Government to frame and notify the social security schemes for such
workers on matters related to life and disability cover, accident insurance, health and maternity
benefits, old age protection, and crèche. The schemes may be funded by the combination of the
Central Government, State Government, aggregators, beneficiaries of the scheme, or funded from
corporate social responsibility. And every worker is required to be registered u/ this ch.
3. Social Security Organisations: Ch-2 provides for the Social Security organizations. The term ‘Social
Security Organisation’ is the collective name given to all the administrative bodies set up under the
Act.

1. Board of Trustees of Employees’ Provident Fund (sec.4 a body corporate)

2. Employees’ State Insurance Corporation,
3. National Social Security Board and State Unorganised Workers’ Board (the National
Board monitor such social welfare schemes for unorganized workers, gig workers, and
platform workers as are administered by the Central Government and the State Boards
monitor such social welfare schemes for unorganized workers as are administered by the
State Government)
4. State Building Workers’ Welfare Boards (Function is to provide death and disability
benefits to a beneficiary or his dependants, make payment of pension to the
beneficiaries who have completed the age of sixty years, etc.)

Thus, the Central Boards and the State Boards are established. Along, the Advisory boards are
established. These advisory boards will be advising the State Boards on the use of the ‘Contribution
Augmentation Fund’ created for the said class of workers

If the central government is of the opinion that the boards and trusts so created by the central gov.
itself then it can order its re-constitution.

4. EMPLOYEES' STATE INSURANCE (sec 25)

The Employees' State Insurance Fund shall be set up for payment of benefits, medical treatment,
and attendance to the insured person, traveling and compensatory allowances, pension, leave and
joining allowances, and payment of contributions to the Government, among other costs that shall
be defrayed by the Employees State Insurance Corporation for administration.

The Code uniformly extends its coverage under the Employees' State Insurance to all establishments
employing 10 or more persons and to plantation workers voluntarily. As per the Employees' State

Insurance Act of 1948, legislation was implemented as per the notification released by every State.
However, under the Code, the Central Government may also extend the applicability to
establishments that engage in hazardous occupations. The responsibility under this Chapter rests on
the employer for registering their employees with the Employees' State Insurance Corporation, for
payment of the contributions, and for releasing the benefits to the workers. The Code provides an
option to establishments employing less than 10 employees for voluntary membership under the
Employees' State Insurance. The insured persons under the Code shall receive benefits like
periodical payments in case of sickness, miscarriage, or sickness due to pregnancy, disablement, and
medical treatment. Dependents of an injured or deceased employee are entitled to receive such
benefits under the Code.

5. GRATUITY (ch-5 sec.53-58): Gratuity is payable to an employee on termination of

employment after continuous service of 5 years. For working journalists, gratuity is
payable on termination of employment after continuous service of 3 years.
Completion of continuous service of 5 years shall not be essential where the
termination of employment of any employee is due to (a) death or (b) disablement
 or (c) expiration of fixed-term employment or (d) happening of any such event as
notified by the Central Government. Employees shall be paid on a pro-rata basis. For
every completed year of service or part thereof in excess of six months, the
employer shall pay gratuity to an employee at the rate of fifteen days' wages or such
number of days as may be notified by the Central Government, based on the rate of
wages last drawn by the employee concerned. A person who is eligible to receive the
gratuity shall make an application to the employer for such payment and the
employer shall arrange to pay the amount of gratuity within thirty days from the
date it becomes payable to the person to whom the gratuity is payable and if not
paid then the amount is accompanied with simple interest. Where there is a dispute
with regard to any matter or matters specified in clause (a), the employer-employee
or any other person raising the dispute may make an application to the competent
authority
6. MATERNITY BENEFIT (Ch. 6 sec 59-72): The provisions relating to maternity benefits
are applicable to:

 APPLICABILITY: a. to every establishment being a factory, mine, or plantation including any

such establishment belonging to the Government; and b. to every shop or establishment in
which 10 or more employees are employed, or were employed, on any day of the preceding
twelve months; and such other shops or establishments notified by the appropriate
Government. Women shall be entitled to maternity benefits of a maximum of 26 weeks of
which not more than 8 weeks shall precede the expected day of delivery;

 A woman who legally adopts a child below the age of three months or a commissioning
mother shall be entitled to maternity benefits for a period of twelve weeks from the date the
child is handed over to the adopting mother or the commissioning mother, as the case may
be.

 Woman shall not work in any establishment during the six weeks immediately following the
day of her delivery, miscarriage, or medical termination of pregnancy;

 Woman shall be entitled to the payment of maternity benefit at the rate of the average daily
wage for the period of her actual absence;

 Woman shall be entitled to receive a medical bonus of Rs. 3,500/- or such amount as notified
by the Central Government from the employer if no pre-natal confinement or post-natal care
is provided for by the employer free of charge.

 Woman shall be allowed 2 breaks of such duration as may be prescribed by the Central
Government, for nursing the child until the child attains the age of 15 months.

 The establishment in which 50 employees or such number of employees as may be

prescribed by the Central Government, are employed shall have the facility of crèche within
such distance as may be prescribed by the Central Government, either separately or along
with common facilities.

 EMPLOYEES COMPENSATION (CH-7): Workers are entitled to compensation from the

employer for cases involving fatal accidents, bodily injury, or death during work. If personal
injury is caused to an employee by accident or an occupational disease listed in the Third
Schedule (Diseases caused by work in compressed air, Diseases due to the effect of heat in
 an extremely hot climate, Snow blindness in snow-bound areas, Diseases due to effect of
cold in extremely cold climate) arising out of and in the course of his employment, his
employer shall be liable to pay compensation. The amount of compensation provided
is equal to 50% of the deceased employee's monthly wages which is multiplied
by relevant (sec.76)
 For employees with permanent total disablement or 60% of the monthly wages
of the injured employee multiplied by relevant factors which are determined by
the Central.
 No claim for compensation shall be entertained by a competent authority unless notice of
the accident has been given and notice is to be within 2 years of the accident. the period of
two years shall be counted from the day the employee gives notice of the disablement to his
employer.
 The Code also lays down detailed provisions relating to accidents occurring outside India say
the employees of (a) masters of ships or seamen; or (b) captain and other members of crew
of aircraft; (c) persons recruited by companies registered in India and working as such
abroad. (sec 83)

7. BUILDING AND OTHER CONSTRUCTION WORKERS (ch- 8): There shall be levied and
collected a cess for the purposes of social security and welfare of building workers at
such rate not exceeding two percent. but not less than one percent. of the cost of
construction incurred by an employer, as the Central Government may, by
notification, from time to time, specify. The cess levied shall be collected from every
employer undertaking building or other construction work. The employer shall,
within sixty days or such period as may be notified by the Central Government of the
completion of each building and other construction work, pay such cess. There shall
be constituted a Building Workers' Welfare Board a fund to be called the Building
and Other Construction Workers' Welfare Fund.
8. Sec-124. Employer not to reduce wages, etc.— No employer in relation to an
establishment to which this Code or any scheme framed thereunder applies shall, by
reason only of his liability for the payment of any contribution under this Code, or
any charges thereunder reduce whether directly or indirectly, the wages of any
employee to whom the provisions of this Code or any scheme framed thereunder
applies or the total quantum of benefits to which such employee is entitled under
the terms of his employment, express or implied.
9. Appellate Tribunal: The Code envisages that the Social Security Appellate Tribunals
(SSATs) shall consist of two members: one of whom shall be a Judicial Member and
the other an Administrative Member. It further provides that the Tribunal in the
National Capital Region of Delhi shall be treated as the Principal Appellate Tribunal
and it shall have three members, one of whom shall be a Judicial Member and the
other two shall be the Administrative Members. The Code provides that the nature
and categories of the officers and staff of the SSAT shall be determined by the
concerned State Government and the officers and staff of the Tribunal shall
discharge their functions under the general superintendence of the Presiding Officer.
The Code further provides that administrative expenditure and salary of the officers
and staff of SSAT shall be borne by the concerned State Board.
10. OFFENCES AND PENALTIES: (CH-12):
In case of any subsequent offense, the penalty will be imprisonment for a
term which may extend to 2 years and with a fine of INR 2,00,000. However,
where such subsequent offence is regarding failure by the employer to pay In
any contribution, charges, cess, maternity benefit, gratuity, or compensation
as per this Code, the penalty will be imprisonment for a term which may
extend to 3 years, but which shall not be less than 2 years and with a fine of
INR 3,00,000.

(DRAW PEHLE THEN SUBSEQUENT OFFENCES)

CONCLUSION: The enactment of the Code on Social Security, 2020 has made
understanding of the scope and ambit of social security laws easier by
consolidating the pre-existing laws. The Code also defined various terms like
gig workers and platform workers which were not previously defined. The
Code will help increase employment opportunities by engaging workers on a
temporary basis and also providing them with the social security.