social security

The Code on Social Security Bill, 2020

INTRODUCED BY

Introduced by

Mr. Santosh Kumar Gangwar

Minister of Labour and Employment

SYNOPSIS

The bill proposes to setting up of social security for unorganized sector including gig and platform workers.

The main objective is to  simplify labor rules into 4 broad categories – Code on Wages, Social Security, Industrial Relations and Occupational Safety and Health

HIGHLIGHTS

Salient Points ()

The bill proposes social security fund using corpus under Corporate Social Responsibility (CSR)

The fund to provide welfare benefits to all workers including gig workers, platform workers and unorganized workers

  • Pension
  • Gratuity
  • Medical Cover
  • Maternity Benefit
  • Death and Disablement benefit

Fixed term employees to be eligible for gratuity after 3 years of continuous employment.

Failure to contribute by Employers will result in one of imprisonment or fine of Rs.50,000 to only fine of Rs. 50,000.

Organizations to provide between 1%-2% of annual turnover towards welfare schemes. 

Falsification of report will result to imprisonment up to 6 months

Central government will have the power to reduce contribution PF/ESI in situation like epidemic, pandemic or natural disaster.

Social security entitlements

2019 version2020
Social security mandated for certain organization based on their size, income ceiling.Central government can mandate security on any organization (subject to threshold size) through a simple notification.
Central government to set up social security funds for unorganized workers, gig workers and platform workers.State government will also be required to set up social security fund.
Establishment of national and state level administering schemes for unorganized sector workers.Gig workers and Platform workers added in establishment of administering schemes.
Gratuity to be provided if the worker completes 5 years of employment.Gratuity term reduced to 3 years.

BACKGROUND

Background Basics ()

The Bill replaces eight central labour laws acts

  1. Employees’ Compensation Act, 1923
  2. Employees’ State Insurance Act, 1948
  3. Employees’ Provident Funds and Miscellaneous Provisions Act, 1952
  4. Maternity Benefit Act, 1961
  5. Payment of Gratuity Act, 1972
  6. Cine Workers Welfare Fund Act, 1981
  7. Building and Other Construction Workers Cess Act, 1996
  8.  Unorganised Workers’ Social Security Act, 2008

The bill also amalgamates 44 labour laws into 4 codes

  1. Wages
  2. Industrial Relation
  3. Social Security and Safety
  4. Health and Working Conditions

KEY STATS

Key Stats ()

Annual growth of India's gig economy by 2023

$455 billion

% CAGR (compound annual growth rate) India's gig economy

17%

TIMELINES

19 Sep 2020
22 Sep 2020
23 Sep 2020

WHY (as per the govt)

Salient Points ()

It aims to provide access to health care and provision of income security to workers

It is for the benefit of all types employees – permanent, gig workers, unorganized workers etc

MEDIA SAYING

VIDEOS

Videos ()

https://economictimes.indiatimes.com/news/economy/policy/3-labour-reform-bills-in-parliament-here-are-the-key-changes/videoshow/78251741.cms

FAQs

Gig workers refers to workers outside of the traditional employer-employee relationship (e.g., freelancers)

Platform workers are workers who access other organizations or individuals using online platforms and earn money by providing them with specific services

They include home-based and self-employed workers.

ORIGINAL BILL

READ OTHER LABOR LAWS

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The main objective is to  simplify labor rules into 4 broad categories – Code on Wages, Social Security, Industrial Relations and Occupational Safety and Health

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