Overview of Code on Social Security, 2020

Code on Social Security, 2020 has come up to reform and consolidate the laws relating to social security. This code is particularly to extent social security to all the employees and workers weather working in an organized or unorganized sector. On 22nd September 2020 social security code was passed by the Lok Sabha and subsequently by Rajya Sabha. And this code has come up with a view to amalgamate simplify and rationalize the relevant provisions of the nine central labour enactments.

The SS code is quite popular as it has been passed by both the houses of the parliament. In 28th September 2020, SS code got the assent of the Parliament. And the best thing about the Code on Social Security is that it has a purpose to amend and consolidate the laws relating to social security to enhance the social security of all employees and workers. This code has come up with many effective benefits to workers like gig workers. And the best part of this article is to summarize some of the important provisions by the social security code.

Code on Social Security, 2020 is a fresh bill that effectively aims to facilitate labour laws implementation. It reduces the multiplicity of definitions and streamlines the number of authorities under various laws. And also ensure to preserve the basic concepts of welfare and benefits of workers. With this code, you could ensure compliance and enforcement of the provisions is achieved easily. Following are the nine central labour laws, this code amalgamates and rationalizes the provisions.

The nine central labour laws are shown below:-

1. The Employees’ Compensation Act, 1923
2. The Employees’ State Insurance Act, 1948
3. The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952
4. The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959
5. The Maternity Benefit Act, 1961
6. The Payment of Gratuity Act, 1972
7. The Cine Workers Welfare Fund Act, 1961
8. The Building and Other Construction Workers Welfare Cess Act, 1996
9. The Unorganized Workers’ Social Security Act, 2008

These are the nine central labour laws of code on Social security, 2020. There are some of the silent features of the social security code that you must know. Some of the effective salient features of the code on social security, 2020:

General features

The social security code is applicable to every establishment that is subject to the minimum threshold of employees. And it is essential to register every establishment to which the SS code applies. The registration process is done within time and as per the central government.
An establishment❜s employer shall maintain records and registers containing particulars like numbers of hours of work performed by employees, wages paid, leave, leave wages, wages for overtime work, attendance, and much more.

Employee’s provident fund

Employee’s provident fund is applicable to every establishment in which twenty or more employees are working. It is liable to contribute ten percent of the wages payable to each employee to the provident fund. The employee is liable to contribute equally to the contribution payable by the employer.

You must know that the employer is not applicable to pay any amount over and above ten percent of the employee❜s wages. But the central government can apply the rate of twelve percent of the wages payable to each employee as a contribution towards the provident fund. And it could be for any establishment or class of establishment.

Employees State Insurance Corporation

The employee’s state insurance corporation is the provisions relating to ESIC and is applicable to every establishment in which ten or more persons are working. And this act is not applicable to the seasonal factory. In employees, state insurance fund contributions user charges and other money shall be paid into a fund. Funds shall be used for payment of benefits, fees and allowances, salaries, and much more.

Every employee in an establishment shall be insured whether electronically or as prescribed by the central government. The employer needs to pay the contribution and shall also recover the employee❜s employee contribution by reducing wages. And in case of failure to pay contribution by the employer, the corporation may pay the benefits to the employee and recover the capitalised value of the benefit paid to the employee.


The gratuity provisions are applicable to every factory, port, mine, oilfield, railway, plantation company, and every shop or establishment in which ten or more employees are working. The eligibility period for payment of gratuity is payable to an employee on termination of employment after continuous service of five years.
The central government may notify gratuity at the rate of fifteen-day wages or a such number of days. And it is based on the rate of wages last drawn by the employee that shall be payable for every completed year of services.

Maternity benefit

Maternity benefits provisions are applicable to every establishment being a factory, plantation, or mine belonging to the government and to every shop or establishment in which ten or more employees are working or were working. Women shall not work in any establishment for six weeks following the day of delivery. The workers shall also be authorized to the payment of maternity benefits at the rate of the average daily wage for the period of actual days of absence,

Employee’s compensation

It is applicable to the employers and employee to whom Chapter IV does not apply.

Social security and cess in respect of building and other construction workers

Applicable to every establishment like building and other construction work and the cess shall be levied and collected for social security.

The code on social security, 2020, is an effective code that is introduced in such a manner to include the larger working individuals. There are many effective benefits of this social security code for the workers. The best thing is that it provides not only social security benefits by framing scheme but also include accurate records of such workers. And through the self-declaration process, it ensures that there is a clear view of the composition of labour capital.

Important: Please note that the information on this page / site is provided as general information for better understanding for the user and does not constitute tax, legal, or other professional advice and must not be used as such. Please consult your professional adviser(s) if you have any questions / doubts regarding the above.

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