The Indian Parliament has taken significant steps to rationalize the 44 existing labour codes in India by consolidating them into four comprehensive codes, enacted by 2020. Among these, the Code on Social Security, 2020 aims to amend and consolidate laws related to social security, extending coverage to all employees and workers across organized, unorganized, and other sectors. This topic is crucial for IAS aspirants, encompassing aspects of polity, governance, and social issues.

Overview of the Code on Social Security, 2020

The Code on Social Security, 2020, is designed to enhance social security measures for workers, ensuring healthcare and income security in cases of contingencies such as old age, maternity, or accidents. It amalgamates nine central labour enactments, including:

• The Employees’ Compensation Act, 1923
• The Employees’ State Insurance Act, 1948
• The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952
• The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959
• The Maternity Benefit Act, 1961
• The Payment of Gratuity Act, 1972
• The Cine Workers Welfare Fund Act, 1981
• The Building and Other Construction Workers Welfare Cess Act, 1996
• The Unorganised Workers’ Social Security Act, 2008

Key Provisions of the Social Security Code, 2020

Expanded Definition of Employees

The Code broadens the definition of employees to include:

• Inter-state migrant workers
• Construction workers
• Film industry workers
• Gig workers and platform workers

Registration of Workers

Provisions are made for the registration of unorganised workers, gig workers, and platform workers, ensuring they receive social security benefits.

Creation of a Social Security Fund

A dedicated social security fund will be established, funded by central and state governments, as well as through Corporate Social Responsibility (CSR) contributions. Digital intermediaries employing gig workers must allocate 1-2% of their annual turnover for this fund.

National Social Security Board

The Code establishes a National Social Security Board to recommend and monitor schemes for various worker categories, ensuring effective administration of the Code.

Significance of the Social Security Code

The Code on Social Security, 2020, is not merely a consolidation of previous laws; it significantly enhances coverage and introduces new benefits for workers in the evolving job market. Key highlights include:

• Enhanced Coverage: The Code recognizes gig and platform workers, expanding social security to include life and disability coverage, maternity benefits, and pensions.
• Inclusion of Fixed-Term Employees: Fixed-term contract workers are now eligible for gratuity, a significant improvement over previous regulations.
• Penal Provisions: The Code includes penalties for non-compliance, ensuring accountability among employers.
• Digitization: All records must be maintained electronically, facilitating better governance and compliance.
• Uniform Definitions: The Code provides clear definitions for wages, reducing ambiguity in determining social security benefits.

Key Issues and Challenges

Despite its advancements, the Code on Social Security, 2020, faces several challenges:

• Neglect of NCL Recommendations: The Code does not fully implement the National Commission on Labour’s recommendations for universal social security coverage.
• Unclear Provisions for Gig Workers: Overlapping definitions for gig and platform workers may lead to confusion regarding applicable schemes.
• Gratuity Provisions for Fixed-Term Workers: Ambiguities remain regarding gratuity entitlements for fixed-term employees with contracts shorter than one year.
• Mandatory Aadhaar Linking: The requirement for Aadhaar numbers may conflict with Supreme Court rulings regarding privacy and entitlements.

Conclusion

The Code on Social Security, 2020 represents a significant step towards enhancing social security for a large portion of the workforce in India. A dedicated regulatory authority could further improve monitoring and efficacy of the schemes, ensuring that all workers benefit from the provisions of the Code.

Frequently Asked Questions (FAQs)

Q1: What is the aim of the Code on Social Security, 2020?

The Code aims to amend and consolidate laws related to social security, extending coverage to all employees and workers in organized, unorganized, and other sectors.

Q2: What will be the outcome of the Code on Social Security, 2020?

The Code will bring unorganized sector workers, gig workers, and platform workers under social security schemes, including life insurance, disability insurance, health and maternity benefits, provident fund, and skill upgradation.