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The year 2019 and 2020 saw the unification of the Indian labour laws into 4 labour codes segregating 29 central laws into 4 segments. This consolidation of laws as we know aims at bringing in ease of doing business.

As India nears the implementation of the codes in the coming financial year, we bring to you a snapshot of the codes in the next couple of weeks.


Code On Social Security, 2020

The Code on Social Security, 2020 is a code to amend and consolidate the laws relating to social security to extend social security to all employees and workers either in the organised or unorganised or any other sectors.

The Social Security Code, 2020 brings unorganized sector, gig workers, and platform workers under the ambit of social security schemes, including life insurance and disability insurance, health and maternity benefits, provident fund and skill up-gradation, etc. The act amalgamates nine central labour enactments relating to social security.

Please find the highlights of the code below.

Key Definitions

  1. “Aggregator” has been defined as a digital intermediary or a market place for a buyer or user of a service to connect with the seller or the service provider.

  2. “Gig Worker” under the SS Code has been defined as a person who performs work or participates in a work arrangement and earns from such activities outside of the traditional employer-employee relationship.

  3. Means a person who employs directly or through any person or on behalf of any person one or more employees in his establishment.

  4. “Employer” means a person who employs directly or through any person or on behalf of any person one or more employees in his establishment. Includes a Contractor and legal representative of the deceased employer.

  5. “Unorganised worker” is A home-based worker, self-employed worker or a wage worker in the Unorganised Sector.

  6.  “Unorganised Sector” is an enterprise owned by individuals or self-employed workers and engaged in the production or sale of goods or providing service of any kind whatsoever, and where the enterprise employs workers, the number of such workers is less than ten (10).

EMPLOYEES’ PROVIDENT FUND (PF)
- Applies to all establishments with 20 or more employees; restrictive definition of employee – covers only those with a salary below threshold wage ceiling to be notified.
- Schemes for PF, pension and Insurance to be framed – to cover aspects such as eligibility of employees to join the fund, time and manner of contributions, etc.
- Period of limitation (five years) for initiation of enquiry and two years for completion of the same.
- Central Government to specify different rates for employees’ contributions to the PF and the period for which such rates would apply for any class of employee
EMPLOYEES’ STATE INSURANCE SCHEME (ESIC)
- Applies to every establishment with 10 or more employees – no threshold for establishments carrying out hazardous or life-threatening occupation;
- Provides sickness, pregnancy-related, disablement, dependents, medical treatment-related benefits as also for funeral expenses;
- Mandates that all employees of covered establishments need to be insured – onus on the employer;
- Recovery of expenses met by the Corporation on account of failure to insure from defaulting employer;
- Contributions due on the last day of the wage period – rates to be notified;
- Presumption of an accident arising out of employment;
GRATUITY
- Code now provides that the completion of continuous service of five years will not be necessary where the termination of the employment of any employee is due to expiration of fixed-term employment or happening of any such event as may be notified by the Central Government.
- Individuals on fixed-term employment included for gratuity on pro-rata basis irrespective of the period of service
- Working journalist will be eligible for gratuity after a continuous service of three years.

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