THE CODE ON SOCIAL SECURITY, 2020

September 19’ 20 September 22’ 20

Introduced in Lok Sabha Passed by Lok Sabha
September 23’ 20
Passed by Rajya Sabha

September 29’ 20 September 28’ 20

Published in E-Gazette Assented by Hon. President

Ensuring universal and comprehensive social security coverage to all workers, with
a decentralized administration to deliver the benefits to them and their families.

INTRODUCTION • EPF shall be applicable to establishments with 20

Code on Social Security (CoSS), 2020 was introduced or more employees.
by withdrawing the earlier Code of 2019, it has amended
• ESI shall be applicable to certain establishments
and consolidated the laws relating to employee’s social
with 10 or more employees; to all establishments
security with the goal to extend social security to all
which carry out hazardous or life-threatening work
employees & workers either in organized, unorganized,
as notified by the central government
or any other sector.
• CoSS 2020 not only recommends or administers
CoSS also amalgamates, simplifies & rationalizes schemes for unorganised sector workers but also
the relevant provisions of the following central dwells into the welfare of gig and platform workers,
labour enactments relating to social security: where such schemes were not applicable till now
and these schemes shall be funded by central
i. The Employees’ Compensation Act, 1923 government, state governments, and aggregators
ii. The Employees’ State Insurance Act, 1948 (as mentioned in Seventh Schedule)
iii. The Employees’ Provident Funds and
Miscellaneous Provisions Act, 1952 KEY DEFINITIONS
iv. The Employment Exchanges (Compulsory • Employee means any person (other than an
Notification of Vacancies) Act, 1959 apprentice engaged under the Apprentices Act,
1961) employed on wages by an establishment,
v. The Maternity Benefit Act, 1961 either directly or through a contractor, to do any
vi. The Payment of Gratuity Act, 1972 skilled, semi-skilled, unskilled, manual, operational,
vii. The Cine Workers Welfare Fund Act, 1981 supervisory, managerial, administrative, technical,
viii. The Building and Other Construction clerical or any other work, whether the terms of
Workers Welfare Cess Act, 1996 employment be express or implied, and also
includes a person declared to be an employee by
ix. The Unorganised Workers’ Social Security the appropriate Government, but does not include
Act, 2008. any member of the Armed Forces of the Union.
• Employer: A person who employs any persons and
APPLICABILITY AND SCOPE specifically includes certain categories of workers:
In the First Schedule of the CoSS 2020, applicability i. in the case of a factory, employer means the
thresholds are defined for each scheme. Some occupier of a factory, i.e., the person with
examples being :- ultimate control over the affairs of the company;
• CoSS 2020 is applicable to any establishment ii. the Code creates special provisions for certain
(subject to size-threshold as may be notified) for classes of establishments such as factories,
making certain benefits mandatory. All eligible mines, dock workers and constructions workers.
establishments are required to be registered under These include separate provisions on licenses,
the Code, unless they are already registered under safety regulations, and duties of employers.
any other labour law.
 iii. in relation to mine, the owner of the mine or agent • Formation of national and state-level Social Security
or manager having requisite qualification under Boards to administer and monitor the social welfare
the law for the time being in force and appointed schemes, review the record keeping functions
by the owner or agent of the mine; performed at the State level and also review the
iv. in relation to any other establishment, the person expenditure from the fund and account for
who, or the authority which has ultimate control unorganized workers, gig workers and platform
over the affairs of the establishment and where workers.
the said affairs are entrusted to a manager or • The EPF, EPS, EDLI and ESI schemes will be
managing director, such manager or managing financed through contributions from the employer
director; and the employee. In case of EPF, the employer
v. contractor; and and the employer each will make contributions of
vi. legal representative of a deceased employer. 10% of wages. Other contributions towards gratuity,
maternity benefit, cess for workers will be given by
• Self-employed Workers who are not employed by an employer. Under other schemes, contributions
an employer, but engage in any occupation in the will be notified by Government from time to time.
unorganized sector subject to monthly earning or • Formation of state-level Building Workers’ Welfare
hold cultivable land. Boards, headed by a Chairperson nominated by the
• Home based Workers means a person engaged in, state government, to administer schemes for
the production of goods or services for an employer building workers to provide them with death and
in his home or other premises of his choice other disability benefits, make payment of pension to the
than workplace of the employer, for remuneration, beneficiaries, frame educational schemes for the
irrespective of whether or not the employer provides benefit of children, meet medical expenses for
the equipment, materials or other inputs. treatment of major ailments, maternity benefit,
frame skill development & awareness schemes,
• Gig Worker means a person who performs work or provide transit accommodation or hostel facility and
participates in a work arrangement and earns from provision and improvement of such other welfare
such activities outside of traditional employer- measures and facilities.
employee relationship. e.g., the freelancers etc. • Section 39, provisions for establishment of medical
• Platform Worker means a person engaged in or education institutions (colleges, dental colleges,
undertaking platform work. For the exchange in nursing colleges and the training institutes) for its
payment such workers work outside traditional officers and staff with a view to improve the quality
employer-employee relationship “organizations or of their services which are to be run by the
individuals to use an online platform to access other Corporation or on the request of the Corporation, by
organizations or individuals to solve specific the Central Government, any State Government,
problems or services or any such other activities Public Sector Undertaking of the Central
which may be notified by the Central Government, in Government or the State Government or any other
exchange for payment. body notified by the relevant government.
• Aggregator means a digital intermediary or a market • Section 53 reduces term for the payment of gratuity
place for a buyer or user of a service to connect with to 3 years (from 5 years) for working journalists.
the seller or the service provider. • Recognition to gig workers, platform workers and
unorganised workers to provide them with schemes
KEY HIGHLIGHTS relating to life and disability cover, accident
• Section 3, lays down the procedure of Registration insurance, health and maternity benefits, old age
for every establishment to which the CoSS 2020 protection, creche, and other benefits as the
applies, to be performed electronically, or otherwise. government may determine.
Also, the provision for cancellation of registration is • Such schemes are to be fully or partially funded by
also provided, if the establishment’s business the combination of central or state government and
activities are in the process of closure. also by aggregators (Seventh Schedule specifies
• Formation of several bodies called Social Security the list of aggregators).Aggregators in this case will
Organisations for administering the provident fund have to contribute between 1-2% of their annual
schemes, pension fund schemes and insurance turnover but shall not exceed 5% of the amount
schemes for gig workers, platform workers and payable to gig workers and platform workers as the
unorganized workers. case maybe, excluding taxes or cess payable to the
central government, as contribution to social
security funds for gig and platform workers.

Data Source: Labour Ministry & leading publications

• The provision to establish social security funds to be including agriculture, domestic service, staff of
established for gig, platform and unorganised Parliament or any State Legislature, any
workers. As stated in the CoSS 2020, “Social employment where the total duration of which is
Security” means “the measures of protection afforded less than ninety days, any establishment (other
to employees, unorganized workers, gig workers and than Government establishment) with less than
platform workers to ensure access to health care and twenty or such number of employees as may be
to provide income security, particularly in cases of old notified by the Central Government.
age, unemployment, sickness, invalidity, work injury,
maternity or loss of a bread winner by means of SOCIAL SECURITY ORGANISATIONS
rights conferred on them and schemes framed, under
For administration of social security schemes, Code
this Code”.
provides for the establishment of several bodies called
• The Code also lays down how various schemes Social Security Organization inter-alia provides for:
would be administered, the role of aggregators , and i. Central Board of Trustees of Employees' Provident
the agencies for implementing the particular Fund. The Central Board is for the administration
scheme, and so on. It also empowers government to of funds, constituting one or more committees of
notify when aggregators have to start contributing. same composition in order to assist it in the
The government also has the power to exempt an discharge of its functions.
aggregator or a class of aggregators from
contributing funds to social security subject to certain ii. Employees' State Insurance Corporation. The
conditions. Corporation has two committees. Standing
Committee to administer the affairs of the
• Setup of Toll free call centre or helpline or such Corporation and exercise any of the powers and
facilitation centers has also been contemplated to perform any of the functions of the Corporation, to
perform any or more of the following functions: submit for the consideration and decision of the
i. to disseminate information on available social Corporation all cases and matters as specified in
security schemes for the unorganized workers, the regulations made in this behalf and submit any
gig workers and platform workers other case or matter for the decision of the
ii. to facilitate filing, processing and forwarding of Corporation. Medical benefit committee is to assist
application forms for registration of unorganized the Corporation and the Standing Committee in
workers, gig workers and platform workers performance of its functions relating to
iii. to assist unorganized workers, gig workers and administration of medical benefits.
platform workers to obtain registration; and to iii. National Social Security Board for Unorganised
facilitate the enrolment of the registered Workers. The Board performs functions like:
unorganized workers, gig workers and platform recommend to the Central Government for framing
workers in the social security schemes. suitable schemes for different sections of
iv. to facilitate the enrolment of the registered unorganized workers, gig workers and platform
unorganized workers, gig workers and platform workers, advise the Central Government on
workers in the social security schemes. matters arising out of the administration of this
• Registration of building workers who has completed Code, monitor social welfare schemes for
18 years of age, but has not completed sixty years of unorganized workers, gig workers and platform
age, and who has been engaged in any building or workers as are administered by the Central
other construction work for not less than ninety days Government, review the record keeping functions
during the preceding twelve months, as a beneficiary. performed at the State level and review the
expenditure from the fund and account.
• Registration of unorganized workers, gig workers and
platform workers for availing the benefits under the The term of Board is three years, and meet thrice
schemes. The conditions to register are to be of in a year to observe rules of procedure relating to
sixteen years of age and to submit self-declaration the transaction of business at its meetings.
electronically or otherwise in such form and in such iv. State Unorganised Workers' Social Security
manner containing such information as may be Board. The Board performs functions like:
prescribed by the Central Government. recommend the State Government for framing
• Provision to report vacancies to career centers suitable schemes for different sections of the
(including employment exchange, place or portal). unorganized sector workers, advise the State
The employer though will not be obligated to hire any Government on such matters arising out of the
person through the career centre. Such provisions administration of this Code, monitor social welfare
will not apply to vacancies in certain employments, schemes for unorganized workers as are
administered by the State Government, review the
Data Source: Labour Ministry & leading publications
 record keeping functions performed at the district OFFENCES AND PENALTIES
level. review the progress of registration and issue of
cards to unorganized sector workers and review the • Where employer fails contribute after deducting the
expenditure from funds under various schemes. employee’s share attracts imprisonment between
The term of Board is three years, and meet once in a one and three years, and fine of INR 1,00,000.
quarter to observe rules of procedure relating to the • Where the employer fails to pay any amount of
transaction of business at its meetings.
gratuity to which an employee is entitled attracts
v. State Building and other Construction Workers' imprisonment for a term which may extend to one
Welfare Boards. The Board perform functions like to year or with fine which may extend to INR 50,000,
provide death and disability benefits to a beneficiary or or with both.
his dependents, to make payment of pension to
beneficiaries who have completed the age of 60 years, • Where the employer commits an offence in
to pay amount in connection with premium for Group contravention of the provisions of Employees State
Insurance Scheme of the beneficiaries, frame Insurance Corporation or Maternity Benefit rules,
educational schemes for the benefit of children of the regulations or schemes made or framed under the
beneficiaries), meet medical expenses for treatment of Code respectively, where he dismisses, discharges,
major ailments of a beneficiary or, such dependent, reduces in rank or otherwise penalizes a woman
make payment of maternity benefit to the
beneficiaries, frame skill development and awareness employee; or obstructs any Inspector-cum-
schemes for the beneficiaries, provide transit Facilitator or other Social Security Organization or
accommodation or hostel facility to the beneficiaries, a competent authority in the discharge of his duties,
formulation of any other welfare scheme for the or fails to provide any maternity benefit to which a
building worker beneficiaries by State Govt in woman is entitled, or fails to produce on demand by
concurrence with the Central Government, make the Inspector-cum-Facilitator any register or
provision and improvement of such other welfare document in his custody; or fails to pay the cess for
measures and facilities as may be prescribed by the building workers which he is liable to pay; or
Central Government. dishonestly makes a false return, report, statement
or information to be submitted shall be imprisoned
FINANCE AND ACCOUNTS OF SSO’s
for a term which may extend to six months or with a
• The role of Social security Organization is to maintain fine which may extend to INR 50,000, or with both.
proper accounts of its income and expenditure in form
and manner prescribed, after consultation with the • Where the employer commits an offence under any
Comptroller and Auditor-General of India and also to of the clauses deducts or attempts to deduct from
get such accounts audited annually by the Comptroller the wages of an employee, the whole or any part of
and AuditorGeneral of India and any expenditure employer's contribution; or reduces the wages or
incurred by him is to be payable by the respective any privilege or benefits admissible to an
Social Security Organization. employee; or fails or refuses to submit any return,
• Where such Comptroller and Auditor-General of India report, statement or any other information required
will have the right to demand the production of books, under this Code or any rules, regulations or
accounts, connected vouchers, documents and schemes; or fails to pay any amount of
papers and to inspect any of the offices of the Social compensation to which an employee is entitled; or
Security Organization. The accounts of a Social fails to send to a competent authority a statement
Security Organization as certified by the Comptroller
and Auditor-General of India or any other person which he is required to send regarding Employees
appointed by him, together with the audit report shall Compensation; or is guilty of any contravention of
be forwarded to the Social Security Organization or non-compliance with any of the requirements of
which shall along with its comments on the audit this Code or the rules or the regulations or
report of the Comptroller and Auditor-General of India schemes made or in respect of which no special
forward the same to the appropriate Government. penalty is provided; or obstructs executive officer in
• SSO would frame a budget each year showing the exercising his functions in respect of employment
probable receipts and the expenditure which it monitoring; or fails to pay any administrative or
proposes to incur and submit a copy of the budget for inspection charges payable under any of the
the approval of the appropriate Government. scheme, shall be punishable with fine which may
• SSO would also submit its annual report of its work,
extend to INR 50,000.
activities & budget adopted by them to the appropriate
Government. The copy of the annual report, budget TRISHALJEET SINGH
and the audited accounts together with the report of • LLB, LLM, 5+ years experience;
CAG of India & comments of respective Social
expert in HR Laws
Security Organization to be laid before each House of
Parliament or State legislature by the government. • Sr Regulatory Compliance Associate

Data Source: Labour Ministry & leading publications

 COMPARATIVE CHART - EARLIER VS NEW PROVISIONS
S.No Earlier Provisions New Provisions

Definitions
• Not Defined: Self-employed Worker, Fixed-term
employment, Aggregator, Career Centre, Home- • New Definitions introduced under the Code of
Based Worker, Unorganised Workers, Gig Social Security
1 Worker & Platform Workers. • New Definition of employee introduced,
• An “Employee” was not defined in Maternity Act, applicable on all the Laws covered under the
Cine Workers Act, Welfare Fund Act, Building
Code of Social Security
and Other Construction Workers Welfare Cess
Act & Unorganized Workers’ Social Security Act

If Establishment is registered under any existing

Registration/ Cancellation of an Establishment was Central Labour Laws, it is not required to obtain
2
required under all the previous labour laws. registration under Section 3 of the Code of Social
Security.

Section 4, The provisions enforce Constitution of

No provisions existed for the formation of Social
Social Security Organizations for the administration
3 Security Organisations under all the previous
of funds for the type of workers which have been
labour laws.
added in the Code of Social Security.

Section 6, The provision enforces National Social

Security Board and (State) Unorganized Workers’
No provisions were made for National Social
Board to be formed by persons of eminence in the
4 Security Board and State Unorganized Workers’
fields of labour welfare, management, finance, law
Board under all the laboiur laws.
and administration. It will also administer schemes
for the welfare of gig workers and platform workers.

Rule-7 of EPF Appellate Tribunal (Procedure)

Section 24, No appeal by the employer shall be
Rules, no appeal by employer shall be entertained
entertained by the Tribunal unless it has deposited
5 by the Tribunal unless it has deposited a Demand
25% of the amount due with Social Security
Draft payable in the Fund and bearing 75% of the
Organization concerned.
amount due from him.
Section 43, provides extra expenditure as sickness
No provision for Excessive Sickness Benefit benefit for insanitary working conditions in the
6
existed in previous labour laws. factory or in the accommodations due to the
neglect of the owner.

No provisions for Schemes for unorganized Section 45, provides Employees State Insurance
7 workers, gig workers and platform workers in benefits to unorganized workers, gig workers and
previous labour laws. platform workers and their families.

Payment of Gratuity Act, the payment of gratuity Section 53, the term for payment of gratuity has
8
term for a working journalist was for 5 years been reduced to three years for working journalists.

Section 109 & Section 114 framed welfare

Funded Schemes for unorganized workers, gig schemes for these workers at Central and State
9 workers and platform workers never occurred in level on matters related to the protection of life,
labour laws. health, accident, education, skill upgradation,
provision of old age home etc.
S.No Earlier Provisions New Provisions

Section 112, provides for set up a toll free call centre or

Helpline, facilitation centre for
helpline to promulgate information on available social security
unorganized workers, gig workers and
10. schemes, process to file application for registration, to assist
platform workers never occurred in
unorganized workers, gig workers and platform workers to
labour laws.
obtain registration etc.

Section 122, states appointment of Inspector-cum-Facilitators

Only Inspectors were appointed to
11. for the inspection. This section also advices the employees
Inspect the Establishment.
and employers to be in compliance of this Code.

Section 123 provides to maintain registers, records for the

number of days/hours of work performed by employees; wage
paid; leave, leave wages, wages for overtime work and
attendance; employees identification number, number of
dangerous occurrences, accidents, injuries in respect of which
The provisions for maintaining registers, compensation; statutory deductions made by an employer
12. records and returns was not so from the wages of an employee; details as to cess paid in
extensive. respect of building and other construction work; the total
number of employees (regular, contractual or fixed-term
employment) on the day specified; persons recruited during a
particular period; occupational details of the employees; and
vacancies for which suitable candidates were not available;
display notices at the workplaces,

No limitation period was mentioned for Section 125, In case of any dispute or proceedings for
13 determination of moneys due from an determination of dues from the employer, fixed the limitation
employer, under the EPF Act period of proceedings and inquiry to be five years.

• Section 134 provides for enhanced punishment for every

subsequent offence.
• Section 137 allows employer an opportunity to correct non-
compliance for any offence under the Code prior to the
initiation of the prosecution or proceedings.
• Compounding of Offence- any offence committed for 1st
Inclusion of Enhanced punishment did
14 time which is punishable with:
not exist in previous labour laws.
Fine & Imprisonment up to 1 year or both.
• Person can be compounded on payment of an amount In
case of fine – half of the maximum fine,
• In case of imprisonment – 3/4th of maximum fine
Repeat offender to get enhanced punishment
(imprisonment up to 2 years and with fine of INR 2 Lakhs)

Section 144, provides that the Central Government may by

No provision for Defer or Reduction of order, defer or reduce employer's contribution, or employee's
15
Contribution existed. contribution, or both for a period up to three months at a time,
in the event of a pandemic, endemic or national disaster
Section 148, if any person has misused any benefit then the
Misuse of benefits did not have any person will be deprived of such benefit where manner to
16 separate provisions under the labour ascertain misuse of any benefit will be specified in the
laws. Provident Fund Scheme or the Pension Scheme or the
Insurance Scheme.
 ABOUT US

Regulatory Risks are amongst "Top 5 Business Risks” globally as there are multiple laws applicable
which are changing frequently, difficult to understand and Compliance to these is everyone’s responsibility.
• We offer RegTech, LexTech & Risk solutions to help "Businesses & Auditors" understand, monitor &
Control Regulatory obligations & risks effectively
• Solutions are created with 10+ Years of experience working on creating Global Regulatory Intelligence
and understanding the real life challenges of managing them - in collaboration with a Big 4.
• Solutions are designed to cater to needs of Global Businesses, Large groups, SMEs & startups
• Create, Manage & Update Regulatory Intelligence in partnership with 100+ Law firms in 70+ countries

OUR SOLUTION PORTFOLIO

ENTERPRISE SOLUTIONS PROFESSIONAL SOLUTIONS

• Global Compliance Management Solution • Compliance Audit Management Solution
• Legal Matter Management Solution • Compliance Service Management Solution
• Risk & Controls Management Solution • Case and Litigation Management Solution

OUR LOCATIONS

DELHI / NCR JAIPUR

CORPORATE OFFICE: 865-A, Tower - B1, Spaze KNOWLEDGE CENTRE: 32, Gopal Tower,
I-Tech Park, Sector 49, Gurgaon - 122002 Dadu Marg, GopalBari, Jaipur - 302001

MUMBAI AHMEDABAD
WeWork Chromium, JVLR, Opp. L&T Business A2/512, Palladium Complex, Corporate Road,
Park, Andheri, Mumbai - 400076 Prahladnagar, Ahmedabad, Gujarat - 380015

PARTNER LOCATIONS: BENGALURU, CHENNAI, HYDERABAD, PUNE, TANZANIA

GET IN TOUCH WITH US

+91-9560-83-4141 | info@lawrbit.com | www.lawrbit.com

Copyright © 2020 Lawrbit Lextech India Private Limited, all rights reserved. Lawrbit makes every effort to use reliable and
comprehensive information, but Lawrbit does not represent that the contents of the report are accurate or complete. This
document has been prepared without regard to the objectives or opinions of those who may receive it. Opinions expressed herein
are entirely those of author(s) & the document is being furnished to you for your information only.
Lawrbit is registered in India having Corporate Identity Number or CIN : U74995RJ2018PTC062060.

FOLLOW US