Introduction
The Code on Social Security, 2020 (CoSS 2020) replaces the earlier enactments with the objective of consolidating, updating, and rationalising India’s social security framework. It unifies multiple central labour laws related to employee protection and extends social security to workers across the organised, unorganised, gig, and platform sectors.
To achieve simplification and uniformity, the Code merges provisions from the following enactments:
The Code aims to create a unified and decentralised structure that facilitates the delivery of benefits to workers and their dependents.
Important legislative milestones include:
Applicability
The First Schedule of CoSS 2020 specifies scheme-wise applicability thresholds. Key highlights include:
Key Definitions
Employee
Any individual employed on wages, whether directly or through a contractor, to perform skilled, semi-skilled, unskilled, managerial, administrative, supervisory, or technical duties. Apprentices under the Apprentices Act, 1961, and members of the Armed Forces are excluded.
Employer
Any entity/individual employing workers, including:
The Code also recognises special categories such as factories, mines, docks, and construction establishments.
Self-Employed Workers
Those who are not employed by an employer, but engage in any occupation in the unorganized sector subject to monthly earning or hold cultivable land.
Home-Based Worker
It means a person engaged in, the production of goods or services for an employer in his home or other premises of his choice other than workplace of the employer, for remuneration, irrespective of whether or not the employer provides the equipment, materials or other inputs.
Gig Worker
A person earning from work arrangements outside the conventional employer-employee relationship.
Platform Worker
A worker performing tasks mediated through an online platform, enabling exchange of services or problem-solving between users.
Aggregator
A digital intermediary or marketplace connecting service providers with consumers.
Key Highlights of the Code
Every applicable establishment must register electronically or otherwise. The Code also sets conditions for cancellation when business operations cease.
The Code establishes multiple bodies to administer schemes:
These bodies frame schemes, monitor implementation, review records, and ensure optimal fund utilisation.
State Welfare Boards implement schemes for:
The ESIC may establish medical colleges, nursing colleges, and training institutes, either directly or through central/state governments, PSUs, or notified bodies.
For working journalists, the qualifying service for gratuity is reduced from 5 years to 3 years.
The Code provides for setup of helplines or facilitation centres to:
Vacancies must be reported to designated career centres except for:
The Code grants formal recognition to gig workers, platform workers, and those in the unorganised sector by extending to them a range of social security schemes. These schemes may include life and disability insurance, accident coverage, health and maternity benefits, old-age protection, crèche facilities, and any additional benefits that the government may prescribe.
The financing of such schemes may come wholly or partly from the Central Government, State Governments, and aggregator platforms listed in the Seventh Schedule. Aggregators are required to contribute 1–2% of their annual turnover, subject to a cap of 5% of the total amount paid to gig and platform workers, excluding any taxes or cess payable to the Central Government.
The Code further enables the establishment of dedicated social security funds for gig, platform, and unorganised workers. It defines “Social Security” as a set of protective measures ensuring workers’ access to healthcare and providing income stability in situations such as old age, unemployment, sickness, disability, work-related injury, maternity, or the death of a primary earner, through rights and schemes framed under the Code.
Additionally, the Code outlines the mechanism for administering these schemes, clarifies the responsibilities of aggregators, and specifies the implementing agencies. The government is empowered to notify the commencement date for aggregator contributions and may also exempt specific aggregators or categories of aggregators from contributing under prescribed conditions
Finance and Accounts of Social Security Organisations
Social Security Organisations
1. Central Board of Trustees – Employees’ Provident Fund (EPF)
Purpose
Administers:
Employees’ Provident Fund (EPF)
Employees’ Pension Scheme (EPS)
Employees’ Deposit Linked Insurance (EDLI)
Structure
Represented by central and state governments, employers, and employees.
May constitute additional committees with identical composition for assisting in fund administration.
Functions
Oversee fund management and investment decisions.
Ensure compliance and enforcement of EPF-related provisions.
Frame regulations and operational procedures for EPF schemes.
Review financial performance of the PF fund annually.
2. Employees’ State Insurance Corporation (ESIC)
Purpose
Manages medical, sickness, disability, maternity, and dependent benefits under the ESI Scheme.
Structure
ESIC consists of two key committees:
a. Standing Committee
Exercises delegated powers of the Corporation.
Administers day-to-day affairs and handles matters assigned under ESIC regulations.
b. Medical Benefit Committee
Advises and assists ESIC and the Standing Committee in administering medical benefits.
Focuses on improving service quality at ESI hospitals and medical facilities.
Additional Functions
May establish medical colleges, nursing colleges, dental colleges, and training institutions (Section 39).
These institutions may be run by ESIC, central/state governments, PSUs, or notified external bodies.
3. National Social Security Board for Unorganised Workers
Purpose
Oversees the welfare of:
Unorganised workers
Gig workers
Platform workers
Key Functions
Recommend welfare schemes to the Central Government.
Advise the government on matters arising from Code implementation.
Monitor central-level welfare schemes.
Review state-level recordkeeping and scheme expenditure.
Examine fund utilisation and performance.
Tenure
The board serves a term of three years.
The Board must meet at least three times each year.
4. State Unorganised Workers’ Social Security Board
Purpose
Administers welfare schemes at the state level for the unorganised sector.
Functions
Recommend state-specific welfare schemes.
Advise the State Government on Code administration.
Monitor implementation of unorganised worker schemes.
Review: record keeping functions performed at the district level, progress of registration, issue of cards to unorganized sector workers and review the expenditure from funds under various schemes
Track scheme expenditure under state-managed welfare programs.
Tenure
The Board’s term is three years.
Meetings must be held once every quarter.
5. State Building and Other Construction Workers’ Welfare Boards
Purpose
Specialised welfare boards dedicated to building and construction workers.
Welfare Functions
Provide:
Death and disability benefits
Pension for beneficiaries above 60 years
Premium payments for group insurance
Maternity benefits
Education scholarships for children
Medical expense support
Develop skill-upgradation programs and awareness schemes.
Provide transit accommodation or hostel facilities.
Formulate additional welfare measures with concurrence of the Central Government.
Offences and Penalties
Failure to deposit employee share of contribution:
Failure to pay statutory gratuity:
Includes wrongful dismissal of a woman employee, obstruction of authorities, or failure to produce documents:
Including unauthorised wage deductions, reduction of benefits, failure to submit returns, non-payment of compensation, and obstruction of officers:
Conclusion
The Code on Social Security, 2020 marks a transformative step towards universalising social protection in India. By integrating nine major labour laws, expanding coverage to gig and platform workers, and establishing a structured system of national and state-level social security boards, the Code aims to build a comprehensive and sustainable social security ecosystem. Its decentralised administration, digitised processes, and accountability mechanisms ensure a modernised framework capable of addressing the evolving needs of the workforce.
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