The Code on Social Security, 2020 passed by the Parliament

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Three Codes to Reform Indian Labour Laws is passed by the Parliament

  1. The Industrial Relations Code, 2020
  2. The Code on Social Security, 2020
  3. The Occupational Safety, Health & Working Conditions Code, 2020

The three codes are part of the four codes that consolidate 29 central labour laws. In 2019, the Code on Wages was passed. These Bills aims to lighten up labour laws to alleviate operational needs for the Industries at the same time bring in social security for all workers, including inter-state migrants plus unorganized workers.

Significant features of the Code on Social Security, 2020

  1. Changes in definitions

The Bill has amended the definitions of certain terms in the Code. These are

  • The Bill widens the definition of ’employees’ to incorporate workers employed via contractors
  • Similarly the definition of “inter-state migrant workers”  is also expanded to incorporate self-employed workers from another state
  •  The definition of “platform worker” is modified  to include additional categories of services or activities as may be notified by the government
  • The definition of “audio-visual productions” is broadened to embrace films, web-based serials, talk shows, reality shows and sports shows
  • The Bill exempt construction works from the scope of “building or other construction work” if the total cost of construction work exceeds Rs fifty lakhs and if they employ more than a certain notified number of workers.
  • Social security entitlements

Previously Bill social security based on thresholds was compulsory but the Bill provides that the Central Government may, by notification, apply the Code to any establishment subject to size-threshold as may be notified.

  • Social security funds for unorganised workers, gig workers and platform workers

The Bill provides that the Central Government has to set up funds for unorganised workers, gig workers and platform workers. Auxiliary, State Governments will as well set up and control separate social security funds for unorganised workers.

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  • National Social Security for gig workers and platform workers

The Bill states for the establishment of a national and various state-level boards for administering schemes for unorganised sector workers, gig workers and platform workers.

The Board shall include:

  • five representatives of aggregators, nominated by the central government
  • five representatives of gig workers and platform workers, nominated by the central government
  • Director-General of the ESIC
  • five representatives of state governments.
  • Function of aggregators

The Bill elucidates that schemes for gig workers along with platform workers may be funded by a combination of contributions from the Central Government, State Governments, as well as aggregators.

 In Schedule 7of the Bill, it identifies a list of aggregators consist of:

  • ride sharing services
  • food and grocery delivery services
  • content and media services
  • E-marketplaces.
  • Offences and penalties

The Bill amends the penalties for certain offences. Such as, the penalty for unlawfully deducting the employer’s contribution from the employee’s wages has been changed from imprisonment of one year or fine of Rs 50,000 to only fine of Rs 50,000. Correspondingly, the maximum imprisonment for obstructing an inspector from performing his duty has been reduced from one year to six months.

  • Additional powers during an epidemic

The Bill included certain new sections which can turn into valid in the cases of an epidemic. Such as, the Central Government can suspend or lessen the employer’s or employee’s contributions under PF and ESI for a period of up to 3 months in the situation of a pandemic, endemic, or national disaster.

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