The Code on Social Security, 2020 consolidates and simplifies nine major social security laws into a single integrated framework, namely:

• Employees’ Provident Funds & Miscellaneous Provisions Act, 1952
• Employees’ State Insurance Act, 1948
• Maternity Benefit Act, 1961
• Payment of Gratuity Act, 1972
• Employees’ Compensation Act, 1923
• Unorganised Workers’ Social Security Act, 2008
• Cine Workers Welfare Fund Act, 1981
• Building and Other Construction Workers (BOCW) Cess Act, 1996
• Building and Other Construction Workers Welfare Act, 1996

The Code aims to standardize and expand social security coverage for organised, unorganised, gig, and platform workers.

1. Objectives of the Social Security Code

• Create a unified social security framework.
• Expand coverage to gig workers, platform workers, unorganised workers, and self-employed persons.
• Simplify compliance for employers.
• Ensure universal access to PF, ESI, maternity benefits, gratuity, and insurance.
• Enable digital registration and electronic benefit delivery.

2. Universal Coverage – New Approach

The Code extends social security to all categories of workers, including:

• Organised sector employees
• Contract workers
• Gig workers (e.g., food delivery partners)
• Platform workers (app-based service providers)
• Unorganised workers (construction, domestic work, etc.)
• Self-employed persons

Registration is through a single universal Aadhaar-based portal.

3. Important Definitions

Employee

A broad definition covering any person employed directly or through a contractor.

Gig Worker

A person earning from activities outside the traditional employer–employee relationship.

Platform Worker

Workers providing services through online or digital platforms.

Unorganised Worker

Workers not covered under PF, ESI, gratuity, or other organised-sector schemes.

4. Social Security Schemes under the Code

The Code empowers Central and State Governments to frame social security schemes for:

4.1 Employees’ Provident Fund (EPF)

• Applicable to establishments with 20 or more employees.
• Voluntary coverage permitted.
• EPF wage ceiling: ?15,000 per month.
• Employee contribution: 12% of EPF wages.
• Employer contribution: 12% of EPF wages.
• Employer EDLI contribution: 0.50%.
• Employer administrative charges: 0.50%.
• Self-employed persons may be covered through future schemes.

4.2 Employees’ State Insurance (ESI)

• Mandatory for establishments with 10 or more employees.
• Voluntary coverage permitted.
• ESI wage ceiling: ?21,000 per month.
• Employee contribution: 0.75%.
• Employer contribution: 3.25%.
• Gig and platform workers may be included through notifications.

4.3 Maternity Benefit

• Right to payment of maternity benefit.
• Paid maternity leave of 26 weeks.
• Crèche facility for establishments with 50 or more employees.
• Medical bonus and nursing breaks.
• Protection against dismissal during pregnancy.
• Coverage extended to adoption and commissioning mothers.

4.4 Gratuity

• Payable after 5 years of continuous service.
• Fixed-term employees eligible after 1 year.
• No minimum service requirement in case of death or disability.

4.5 Employees’ Compensation

• Compensation for injury, disability, or death during employment.
• Increased penalties for employer non-compliance.
• Employer’s liability clearly defined.
• Rules for calculation and distribution of compensation.
• Compensation provisions applicable in contract employment.

4.6 Social Security for Gig & Platform Workers

• Central and State Governments to create special social security funds.
• Gig platforms may be required to contribute 1%–2% of annual turnover.
• Contribution capped at 5% of payments made to workers.

4.7 Social Security for Unorganised Workers

Schemes may include:

• Life and disability insurance
• Health and maternity benefits
• Old-age protection
• Education support
• Housing schemes

Mandatory registration on the Government portal is required.

5. Aggregators’ Contribution (New Provision)

• Specified digital platforms must contribute to the Social Security Fund.
• Contribution: 1%–2% of annual turnover.
• Maximum limit: 5% of payments made to gig/platform workers.

6. Cess for Building & Construction Workers

• Cess to be levied at 1%–2% of construction cost.
• Funds used for welfare measures such as education, health, and pension.

7. Aadhaar-Based Universal Registration

• All workers allotted a Universal Social Security Account Number (USSA).
• Simplifies registration for migrant, seasonal, gig, and unorganised workers.
• Portability ensures benefits across States.

8. Compliance Framework for Employers

• Unified registration for all social security schemes.
• Single electronic return.
• Single electronic inspection mechanism.

9. Penalties & Offences

Higher Penalties for Non-Compliance

• Failure to deposit EPF/ESI: fines and imprisonment.
• Repeat offences: imprisonment up to 3 years.
• Minor offences may be compounded to reduce litigation.