Objectives and Salient features of the Code on Social Security, 2020.

Objectives and Salient Features of the Code on Social Security, 2020

The Code on Social Security, 2020 is one of the four major labour codes enacted by the Government of India as part of a historic labour law reform initiative. It consolidates and rationalises nine central labour laws relating to social security, such as provident fund, employees’ insurance, gratuity, maternity benefits, and welfare of unorganised workers. The Code seeks to create a comprehensive, inclusive, and simplified framework to provide social protection to all categories of workers—organised , unorganised ,gig, and platform workers—reflecting India’s evolving employment landscape.

1. Objectives of the Code on Social Security, 2020

(a) Consolidation and Simplification of Laws
The Code’s primary objective is to amend, simplify, and unify the complex and overlapping social security legislations into a single, coherent framework. It merges nine existing laws, thereby removing inconsistencies and reducing the compliance burden on employers while ensuring clarity and uniformity in social security provisions.

(b) Universalisation of Social Security

A key objective of the Code is to extend social security benefits to all workers, including those in the unorganised sector, as well as gig and platform workers who were previously excluded from formal welfare mechanisms. The Code thus aims to achieve universal coverage across different classes of employment.

(c) Protection and Welfare of Workers

The Code seeks to ensure that workers have access to essential benefits such as healthcare, maternity relief, pension, provident fund, and gratuity, thereby safeguarding them against life’s contingencies such as sickness, disability, maternity, old age, and death.

(d) Promoting Ease of Compliance and Governance

By consolidating laws and introducing technology-driven mechanisms, the Code facilitates ease of doing business while maintaining worker protection. It promotes self
declaration, electronic record-keeping, and digital compliance for greater transparency and efficiency.

(e) Strengthening Institutional Framework

The Code establishes and empowers several Social Security Organisations—such as the Employees’ Provident Fund Organisation (EPFO), Employees’ State Insurance Corporation (ESIC), and various Social Security Boards—to ensure effective implementation and monitoring of social security schemes.

2. Salient Features of the Code on Social Security, 2020

(a) Consolidation of Nine Legislations

The Code amalgamates nine major laws, including the Employees’ Provident Funds Act, Employees’ State Insurance Act, Payment of Gratuity Act, Maternity Benefit Act, and Unorganised Workers’ Social Security Act, creating a single, streamlined legal structure for social security.

(b) Coverage of Unorganised, Gig, and Platform Workers

For the first time, the Code recognises gig workers (independent contractors) and platform workers (those working through online platforms such as ride sharing or food delivery apps). It mandates the creation of social security schemes for these new categories of workers to ensure their welfare and income protection.

(c) Establishment of Social Security Organisations

The Code provides for the constitution of the following bodies:
• Central Board of Trustees of the Employees’ Provident Fund
• Employees’ State Insurance Corporation
• National and State Social Security Boards for Unorganised Workers
• State Building and Other Construction Workers’ Welfare Boards

These organisations are tasked with designing, implementing, and monitoring welfare schemes for different classes of workers.

(d) Digitalisation and Registration

A significant feature of the Code is the creation of a centralised digital portal for registration of workers, employers, and establishments. This enables easier access to benefits, ensures better record-keeping, and enhances transparency in fund management.

(e) Employer’s Obligations and Compliance

Employers are required to register establishments, contribute to social security funds, and maintain records electronically. Non-compliance attracts penalties and prosecution, ensuring accountability and timely payment of benefits.

(f) Social Security Schemes

The Central and State Governments are empowered to frame and notify social security schemes relating to life and disability cover, health and maternity benefits, provident fund, pension, and employment injury benefits for various categories of workers.

(g) Welfare of Construction Workers

The Code retains provisions relating to the Social Security Cess for building and construction workers, ensuring that cess collections are used for their health, safety, and welfare.

3. Significance of the Code

The Code on Social Security, 2020 marks a progressive shift from fragmented welfare laws to an integrated, inclusive system. It balances the need for worker protection with ease of compliance for employers. By leveraging technology and extending coverage to informal and digital labour sectors, it strengthens India’s commitment to social justice and inclusive economic growth.
Ultimately, the Code envisions a comprehensive social security framework that guarantees every worker—irrespective of occupation or employment status—the right to financial and social protection throughout their working life.

Conclusion

The Code on Social Security, 2020 represents a significant step towards the consolidation, simplification, and modernization of India’s social security framework. Its primary objective is to ensure comprehensive social security coverage for all categories of workers, including those in the unorganised sector, gig workers, and platform workers, who were largely excluded under earlier fragmented legislations. By integrating multiple social security laws into a single code, the legislation seeks to promote uniformity, reduce legal complexity, and enhance ease of compliance for employers and effective implementation by authorities.

The salient features of the Code—such as the extension of social security benefits to new forms of employment, establishment of social security funds, digitisation of records, portability of benefits, and strengthened enforcement mechanisms—reflect a progressive and inclusive approach. The Code balances the welfare of workers with the operational needs of employers by providing flexibility while ensuring minimum social protection standards. Overall, the Social Security Code, 2020 aims to build a robust, transparent, and inclusive social security system that aligns with the evolving nature of work and contributes to social justice, economic stability, and sustainable workforce development in India.