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The Code on Social Security, 2020
Code on Social Security, 2020 was introduced in Lok Sabha on 19th September 2020 vide Bill No. 121 of 2020 to withdraw the pending Code on Social Security, 2019, and to propose a fresh Bill, namely, the Code on Social Security, 2020 is expected to amend and consolidate the laws relating to social security to all employees and workers either in the organized or unorganized or any other sectors or for matters connected therewith or incidental thereto.
The Second National Commission on Labour, which submitted its report in June 2002 had recommended that the existing set of labor laws should be broadly amalgamated into the following groups, namely:—
(a) industrial relations;
(b) wages;
(c) social security;
(d) safety; and
(e) welfare and working conditions.
In pursuance of the recommendations of the said Commission and the deliberations made in the meeting comprising of the Government, employers’ and industry representatives, the Code on Social Security, 2019 was introduced in the Lok Sabha on 11th December 2019 with a view to amalgamate, simplify and rationalize the relevant provisions of the following nine central labor enactments relating to
social security, namely:—
(i) The Employees’ Compensation Act, 1923;
(ii) The Employees’ State Insurance Act, 1948;
(iii) The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952;(iv) The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959;
v) The Maternity Benefit Act, 1961;
(vi) The Payment of Gratuity Act, 1972;
(vii)The Cine Workers Welfare Fund Act, 1981;
(viii) The Building and Other Construction Workers Welfare Cess Act, 1996; and
(ix) The Unorganised Workers’ Social Security Act, 2008.
The amalgamation of the said laws will facilitate the implementation and remove the multiplicity of definitions and authorities without compromising the basic concepts of welfare and benefits to workers The Code on Social Security, 2019 was referred to the Parliamentary Standing Committee on Labour on 24th December 2019 and the Committee has submitted its report on 31st July 2020 with certain recommendations. After incorporating the valuable suggestions of the Committee, it has now been decided to withdraw the pending Code on Social Security, 2019, and to propose a fresh Bill, namely, the Code on Social Security, 2020.
The salient features of the Code on Social Security, 2020, inter alia, are –
- Social security funds for unorganized workers, gig workers, and platform workers, with state governments setting up separate social security funds for unorganized workers. Any aggregator may set aside funds between 1-2% of the annual turnover as decided by govt for such social security funds - not exceeding 5%
- The definition of employees expanded to include more workers like - inter-state migrant workers, platform workers, film industry workers, and construction workers.
- The gratuity period for working journalists reduced from five to three years.
- The penalty for unlawfully deducting the employer’s contribution from the employee’s wages is only Rs 50,000 fine with no imprisonment.
- The central government may defer or reduce the employer’s or employee’s contributions (under PF and ESI) for a period of up to three months in the case of a pandemic, endemic, or national disaster. Representation of central government officials in the National Social Security Board for unorganized workers increased to 10 members.
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