The Code on Social Security, 2020
The Code on Social Security, 2020
๐ Overview:
The Code on Social Security, 2020 is a comprehensive legislation passed by the Indian Parliament to consolidate and simplify existing laws relating to social security and welfare of workers.
It replaces and repeals several older laws related to social security like the Employees' Provident Funds and Miscellaneous Provisions Act, Employees' State Insurance Act, Maternity Benefit Act, and others.
The Code aims to provide a universal social security system applicable to all workers, including those in organized and unorganized sectors.
It also expands social security coverage to gig workers and platform workers for the first time.
๐ Key Features of the Code:
| Aspect | Details |
|---|---|
| Objective | Consolidate and simplify social security laws and extend coverage to all workers |
| Date Enacted | September 28, 2020 |
| Applicability | All establishments and workers, including unorganized, gig, and platform workers |
| Main Benefits Covered | Provident Fund, Pension, Insurance, Maternity Benefit, Gratuity, Employee State Insurance (ESI) |
| New Categories Included | Gig workers, Platform workers |
| Social Security Schemes | The Code empowers the Central Government to formulate schemes for various categories of workers |
| Contributory System | Employers and employees contribute to social security funds |
| National Social Security Board | Established to oversee social security policy and implementation |
| Maternity Benefit | Extends maternity leave to 26 weeks |
| Gratuity Provisions | Simplified with increased monetary thresholds |
| Inspections & Compliance | Provisions for inspections to ensure compliance |
| Penalties & Offences | Defined penalties for non-compliance |
| Social Security Fund | To finance schemes for unorganized and informal workers |
๐ Social Security Benefits Covered
| Benefit | Description |
|---|---|
| Employees' Provident Fund (EPF) | Retirement savings scheme contributed by employer and employee |
| Employees' State Insurance (ESI) | Health insurance and medical benefits for employees |
| Maternity Benefit | Paid leave for childbirth and related benefits |
| Gratuity | Lump sum payment after a minimum period of service |
| Pension | Financial security after retirement |
| Unemployment Benefit | For workers rendered unemployed (subject to scheme formation) |
| Social Security for Gig & Platform Workers | New schemes to extend coverage to this previously unregulated category of workers |
๐ Importance of the Code
| Significance | Details |
|---|---|
| Unified Legal Framework | Replaces 9 different labor laws to reduce complexity |
| Universal Social Security | Extends benefits beyond formal sector to informal, gig, and platform workers |
| Promotes Formalization | Encourages registration and regulation of unorganized sectors |
| Flexibility in Implementation | Allows Central Government to tailor schemes according to sector needs |
| Improved Social Protection | Increases maternity benefits, simplifies gratuity, and covers health insurance |
๐ Key Changes Introduced
| Before the Code | After the Code on Social Security, 2020 |
|---|---|
| Separate laws for provident fund, maternity, ESI, etc. | Single consolidated code covers all aspects of social security |
| Limited coverage mainly to formal sector | Expanded coverage including gig and platform workers |
| Maternity leave limited to 12 weeks | Maternity leave extended to 26 weeks |
| No specific provisions for gig workers | Explicit recognition and provisions for social security of gig and platform workers |
| Complex and overlapping compliance procedures | Simplified registration and compliance |
๐ Criticisms & Challenges
| Issue | Concern |
|---|---|
| Implementation delays | Some schemes under the Code require further notification and rules to be notified by the govt. |
| Coverage of informal sector | Extent of coverage and enforcement for informal workers remains a challenge |
| Complexity for small businesses | Compliance may be difficult for small employers |
| Benefits adequacy | Some argue benefits still insufficient for large informal workforce |
Summary
| Parameter | Details |
|---|---|
| Name | The Code on Social Security, 2020 |
| Purpose | Consolidate social security laws; widen coverage |
| Key beneficiaries | Formal workers, unorganized workers, gig & platform workers |
| Main benefits | Provident fund, maternity benefit, pension, gratuity, ESI |
| Status | Enacted in 2020; rules and schemes in implementation stage |
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