Code on Social Security, 2020
Introduction
The Code on Social Security, 2020, seeks to amend and consolidate laws relating to social security with the goal to extend social security to all employees and workers, both in the organised and unorganised sectors.
It amalgamates the following laws:
The Employees’ Compensation Act, 1923
The Employees’ State Insurance Act, 1948
The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952
The Maternity Benefit Act, 1961
The Payment of Gratuity Act, 1972
The Unorganized Workers’ Social Security Act, 2008
The Cine Workers Welfare Fund Act, 1981
The Building and Other Construction Workers Cess Act, 1996
The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959
- Workers of both organised and un-organised sectors covered.
- Earlier, gratuity was due only on completion of five years. Now, fixed-term employees (FTEs) are also covered and eligible for payment of gratuity on a pro-rata basis
- Establishments employing 100 or more workers permitted to maintain a provident fund account
- Option for opting out from the voluntary coverage is provided, subject to such conditions as may be prescribed by the Central Government
- Digital intermediary or a marketplace now required to contribute towards the social security and welfare of the unorganised, gig, and platform workers
- A social security fund is also proposed to be created for the unorganised sector
- Single registration and single returns
- Provision of common registers and records
- Limitation period for initiation of inquiry by authorities for assessment and determination of money dues from employers provided as five years
Immediate Action
- Entities employing unorganised workers, gig workers, and FTEs to assess the financial and contractual impact of social security
- Corresponding changes in financial statements to be addressed
For any enquiry, please reach out to us at:
in_labourcodes@pwc.com
Follow PwC India
