Page 22 - Plastics News November 2020

New Labour Laws Explained (Part II): The Code On Social Security 2020

The Code on Social Security 2020 was one of the three
labour law bills passed by the Parliament in September
2020. In this part, we will discuss the Code on Social
Security 2020, and the major changes brought by it.
The Code on Social Security, 2020 The Code consolidates
nine different central laws:
Ÿ The Employees Provident Fund and Miscellaneous
Provisions Act, 1952
Ÿ The Employees State Insurance Act, 1948
Ÿ The Maternity Benefit Act,1961
Ÿ The Building and other Construction Workers Cess
Act .
Ÿ The Payment of Gratuity Act, 1972 Also, the State Governments are mandated to frame
Ÿ The Employees Exchange (Compulsory Notification shceme for these employees in relation to (i) provident
of Vacancies) Act, 1959 fund; (ii) employment injury benefit; (iii) housing; (iv)
educational schemes for children; (v) skill upgradation
Ÿ The Cine Workers Welfare Fund Act, 1981
of workers; (vi) funeral assistance; and (vii) old age
Ÿ The Unorganized Workers' Social Security 2008 homes.
Ÿ Employees Compensation Act, 1923 Every unorganised worker, gig worker or platform worker
The Code repeals the above enactments. Gig workers, shall be required to be registered under the Code
Platform workers, unorganized workers made eligible provided that the person has completed 16 years of age.
for welfare measures. A notable feature of the Code is Aadhaar number is mandatory for such registration
that it extends the protection of welfare measures to 'gig Role of aggregators:
workers', 'platform workers' and 'unorganized workers'.
The Code states that schemes for gig workers and
The Code defines "gig worker" as a person who performs platform workers may be funded through a combination
work or participates in a work arrangement and earns of contributions from the central government state
from such activities outside of traditional employer- governments, and aggregators, who are listed in
employee relationship (Section 2(35). This will cover Schedule 7. The Schedule lists nine categories including
those who work as delivery persons for online food ride-sharing services, food and grocery delivery
delivery platforms, e-commerce sites etc. services, content and media services, and e-
Platform worker' is a person who has a work arrangement marketplaces. Any contribution from such an aggregator
outside of a traditional employer-employee relationship may be at a rate notified by the government falling
in which organisations or individuals use an online between 1-2% of the annual turnover of the aggregators.
platform to access other organisations or individuals to However, such contribution cannot exceed 5% of the
solve specific problems or to provide specific services or amount paid or payable by an aggregator to gig workers
any such other activities which may be notified by the and platform workers.
Central Government, in exchange for payment(Section Definition of 'wages' revised: Section 2(88)
2(60)).
The Code says that all remuneration (in monetary
"Unorganised worker" means a home-based worker, self-
employed worker or a or a wage worker in the terms), whether by way of salaries, allowances, or
unorganised sector and includes a worker in the otherwise, would form part of wages and also includes
organized sector who is not covered by the Industrial basic pay, dearness allowance, and retaining allowance.
Disputes Act, 1947 or Chapters III to VII of the The components excluded for calculation of wages
Code(Section 2(86)).
under the Code are bonus not forming part of
The Code mandates that the Central Government should remuneration, house rent (or the value of living
frame a scheme for the welfare of these classes of
employees in relation to (i) life and disability cover; (ii) accommodation), provident fund, commission to the
health and maternity benefits; (iii) old age protection; employee, overtime allowance, and conveyance
(iv)education; and (v) any other benefit as may be allowances, where the aggregate amount paid under
determined by the Central Government (Chapter IX). these heads does not exceed 50 percent of the total

NOVEMBER 2020 22 Plastics News