##New Labour Code: Code on Social Security,2020

 

Code on Social Security, 2020

 

India has recently reformed its labour laws by combining many old laws into four new labour codes. One of the most important among them is the Code on Social Security, 2020. This law aims to provide social security benefits to a larger number of workers, including those working in the unorganised sector, gig workers, and platform workers.

This Code tries to make sure that more people get benefits like provident fund, health insurance, gratuity, maternity benefits, and compensation in case of accidents.

1. Why Was This Code Introduced?

Earlier, social security laws were scattered across many different Acts, which made compliance difficult for employers and confusing for workers. The Code on Social Security, 2020 replaces and combines nine major labour laws, such as:

• Employees’ Provident Fund (EPF) Act
• Employees’ State Insurance (ESI) Act
• Payment of Gratuity Act
• Maternity Benefit Act
• Employees’ Compensation Act

The main goals of the Code are:

• To cover more workers under social security
• To simplify rules and reduce paperwork
• To include gig and platform workers
• To make compliance easier for businesses

2. Who Is Covered Under This Code?

One of the best features of this Code is that it covers many types of workers. It applies to:

• Employees working in factories, offices, shops, and other establishments
• Unorganised workers such as street vendors, domestic workers, and self-employed persons
• Gig workers like delivery partners and freelance workers
• Platform workers who work through apps such as Ola, Uber, Swiggy, Zomato, etc.

This means that even people who do not have a traditional employer-employee relationship can get social security benefits.

3. Main Benefits Under the Code

The Code provides a legal framework for the following benefits:

(a) Provident Fund (PF)

• PF will continue for establishments with 20 or more employees.
• Smaller establishments may also join voluntarily.

(b) Employees’ State Insurance (ESI)

• ESI provides medical and health benefits to employees.
• The government can change the coverage limit as needed.

(c) Gratuity

• Fixed-term employees will get gratuity even if they have not completed 5 years.
• Gratuity will be payable after completing one year of service in case of fixed-term contracts.

(d) Maternity Benefits

• Women employees will continue to get maternity leave and related benefits.
• Special schemes may be made for women workers in the unorganised sector.

(e) Employee Compensation

• Workers will get compensation for injury, disability, or death caused during employment.

4. Social Security for Gig and Platform Workers

For the first time, Indian law clearly recognises gig and platform workers.

The government can introduce special welfare schemes for them, such as:

• Life and accident insurance
• Health and maternity benefits
• Old-age pension
• Education support for children

Money for these schemes may come from:

• Central and State Governments
• A small charge (cess) on digital platforms
• Voluntary contributions

This is a positive step for people working through online platforms.

5. Easier Compliance for Employers

The Code also focuses on using technology to make compliance easier. It provides for:

• One common registration for establishments
• Online filing of records and returns
• Digital inspections

This will save time and reduce paperwork for employers.

6. Important Concerns

Even though the Code is a good step, there are some issues:

• The Code is not fully implemented yet because many States have not issued their rules.
• Most benefits for gig and unorganised workers depend on future government schemes.
• Digital platforms may oppose the extra financial burden.
• Some definitions in the Code are not very clear and may cause legal disputes.        

7. What Should Employers and Workers Do Now?

For Employers:

• Review how workers are classified (employee, contractor, gig worker)
• Prepare for online registration and filings
• Plan for possible extra contributions

For Workers:

• Keep track of new government schemes
• Register on official portals when announced
• Keep records of work and income

The Code on Social Security, 2020 is a major reform that aims to protect more workers in India. By including gig and platform workers and simplifying rules, it matches today’s working realities.

However, its success will depend on proper implementation and clear government rules. Both employers and workers should stay informed and prepared for these changes.