Explore the Benefits Introduced for Workers Under the Social Security Code, 2020

Written by Saptaparni Raha, Lawyer

Introduction

The Parliament passed the Social Security Code in 2020 and received its presidential permission on September 28, 2020. This code aims to consolidate the laws related to social security for all employees and workers.

Benefits

• The social security code provides central and state governments the right to notify schemes for gig workers. It would include life and disability cover, health and maternity, provident fund, employment injury benefits, etc. Every gig worker and unorganized worker must be registered once they complete the age of sixteen or any other prescribed age and submit a self-declaration containing the information the central government specifies.

• According to this code, the central government may establish a provident fund where employers would contribute 10% of the wages payable to each employee in the provident fund. Upon notification, Central Government can increase the contribution to 12% for specific establishments.

• The social security code mentions the eligibility for gratuity. Every shop or establishment with 10 or more employees on any day in the preceding 12 months shall be eligible for gratuity. The eligible employee is those who have rendered continuous service for not less than 5 years. These employees would receive compensation on their superannuation, resignation, death, disablement due to accident or disease or termination of a contract under fixed-term employment.

• If the majority of employees and the employer of any establishment agree, they can register for voluntary registration under employee state insurance. This scheme includes any hazardous occupation irrespective of the number of employees employed. The social security code also provides coverage to the gig workers and unorganized sector under the employee state insurance scheme.

• In any establishment, no woman shall work during the six weeks immediately following the day of her delivery, miscarriage, or medical termination of pregnancy.

Conclusion

The social security code was enacted at a time when the employment structure of our country was changing rapidly. The code has included fixed-term employees, gig workers, platform workers, etc., giving them benefits like traditional employment.

Reference

• Ashima Obhan and Akansha Dua, The Social Security Code, 2020 (Mondaq)

• Nancy Garg, Salient Features of code on social security,2020 (Taxguru)

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