India’s labour landscape has undergone a significant transformation with the introduction of the Social Security Code, 2020, a key component of the government’s effort to consolidate and modernise labour laws. This code simplifies existing regulations and extends social security benefits to a wider range of workers, including those in unorganised and gig sectors.
What is the Social Security Code?
The Social Security Code (SSC), 2020 consolidates nine existing labour laws related to social security, including provisions on:
- Provident Fund (PF)
- Employee State Insurance (ESI)
- Maternity benefits
- Gratuity
- Workers’ compensation
- Social security for gig and platform workers
By bringing all these under one framework, the SSC ensures uniformity, clarity, and efficiency in administering social security benefits to employees across India.
Key Features of the Social Security Code
The Social Security Code is designed to be inclusive, employee-friendly, and employer-compliant. Some of its major features include:
- Universal Coverage – Expands social security benefits to all workers, including those in informal, gig, and platform-based employment.
- Consolidation of Laws – Streamlines multiple labour laws into a single, easy-to-understand code.
- Simplified Administration – Provides a centralised system for registration, contribution, and claims, reducing compliance burden.
- Maternity and Childcare Benefits – Ensures support for women employees and working parents.
- Social Security Funds – Establishes welfare funds for different categories of workers to secure financial protection during contingencies.
Who Is Covered Under the Social Security Code?
The SSC applies to a wide spectrum of workers, including:
- Employees in factories, shops, and commercial establishments
- Workers under the Employees’ Provident Fund and ESI schemes
- Gig and platform workers (such as app-based delivery and freelance professionals)
- Unorganised sector workers eligible for social security benefits
This inclusivity ensures that every worker in India can access key social security protections.
Why Compliance Matters
For businesses, compliance with the Social Security Code is crucial to:
- Avoid legal penalties and fines
- Ensure employee satisfaction and retention
- Maintain a transparent and ethical workplace
- Build a positive organisational reputation
Employers must ensure timely registration, contribution, and maintenance of records as mandated under the code.
How Sankhla Corporate Services Can Help
Navigating the Social Security Code can be complex, but expert assistance makes compliance seamless. At Sankhla Corporate Services, we provide end-to-end Social Security Code compliance services in India, including:
- Registration under EPF, ESIC, and other social security schemes
- Contribution calculation and timely remittance
- Maintenance of statutory records and reports
- Guidance on maternity, gratuity, and other benefits
- Assistance during inspections and audits
Our team ensures your organisation remains fully compliant while focusing on core business operations.
Key Provisions-
- Universal social security coverage for organised + unorganised workers
- Inclusion of gig workers and platform workers (first time in India – Sections 113 & 114)
- Expanded EPF (20+ employees), ESI (nationwide, no area limits)
- Maternity benefits + enhanced childcare (crèche facilities)
- Gratuity eligibility: Now after 1 year for fixed-term employees
- Social Security Fund for unorganised workers
- Portability via Aadhaar-linked accounts
- Accident coverage during commute
- 2025-2026 updates: Implementation status, new rules, government schemes
Key Takeaways
The Social Security Code, 2020 is a landmark legislation that safeguards workers’ rights while simplifying compliance for employers. By understanding and implementing its provisions effectively, businesses can create a safe, secure, and motivated workforce.
Benefits for Workers & Employers
- Workers: Health, pension, maternity, gratuity, insurance.
- Employers: Simplified compliance, digital registration, reduced fragmentation.
FAQS On Social Security Code
Refrence- Government of India Ministry of Labour and Employement Department
Question- Who is Covered Under the Code?
Employees (organised sector), gig/platform workers, unorganised workers, inter-state migrants, fixed-term employees.
Question- Are nursing breaks strictley limited to two fixed intervals?
Ans- No. While the Rules prescribe minimum nursing breaks, they also allow additional
time, including travel time, depending on the distance to the crèche or childcare facility.
Question- Can Social Security Funds be merged with general government accounts?
Ans- No. The Rules mandate that Social Security Funds be maintained as separate
accounts. They also provide for periodic reporting, audit by the Comptroller and Auditor
General of India (CAG), and restricted utilisation exclusively for worker welfare.
Question-Are the Social Security Rules rigid and inflexible?
Answer: No. The Rules explicitly allow revision of limits, forms, contribution rates, and
procedures through government notifications, enabling adaptability to emerging needs.
Question- Who is responsible for payment of BOCW Cess?
Answer– Responsibility is clearly allocated among employers, contractors, government
departments, and public sector undertakings, depending on the nature and execution of the
construction work.
Question- Can maternity benefit claims be rejected for not using prescribed forms?
Ans- No. The Rules clearly state that procedural lapses do not defeat substantive rights.
Applications may be submitted physically on plain paper or electronically, and claims cannot
be rejected solely due to non-use of prescribed formats.
Question- Is refund of excess BOCW Cess allowed?
Answer: Yes. The Rules provide a time-bound refund mechanism for excess cess deposited,
following assessment or appellate orders.
Question- Must all records be maintained only at the workplace?
Answer: No. The Rules allow electronic maintenance of records or storage at a notified
nearby location, provided they are accessible during inspection.
Question- Can the Social Security Rules be amended only through Parliament?
Ans- No. The Rules constitute subordinate legislation. Accordingly, they can be modified,
revised, or updated through government notifications, without requiring Parliamentary
approval.
Question- Does registration under the Rules guarantee automatic payment of benefits?
Ans- No. Registration is only an entry point that enables workers to access various social
security schemes. Benefits are payable only under schemes that are onboarded on the
relevant portal (such as the e-Shram portal) and subject to fulfilment of scheme-specific
eligibility conditions.
Question- How is gratuity payable to minor nominees protected?
Answer: The Rules require gratuity amounts payable to minor nominees to be invested in
term deposits with specified nationalised banks, ensuring safety and future benefit to the
nominee.
Question- Are trusts managing exempted funds unregulated?
Answer: No. The Rules mandate Boards of Trustees, equal employer-employee
representation, periodic meetings, and arm’s-length governance norms.
Question- Are all procedures under the Social Security Rules mandatory in digital mode?
Ans- No. While the Rules prioritise digital processes to ensure transparency and ease of
access, physical submission is also permitted in specified cases. For instance, claims relating
to gratuity and maternity benefits may be submitted physically in addition to electronic
modes.
Question- Can BOCW Cess be paid in instalments without disclosures?
Answer: No. Instalment payments are allowed only with disclosure of work progress and cost
assessment, and are subject to verification and scrutiny.
Question- Does delay in filing gratuity applications lead to forfeiture of claims?
Answer– No. The Rules explicitly provide that delay alone cannot invalidate a gratuity claim.
Question- Are exempted establishments free from regulatory oversight?
Answer– No. Exempted establishments must meet eligibility conditions, audit and reporting
requirements, and exemptions may be cancelled upon structural changes.
Question- Do construction workers lose welfare benefits when they move across States?
Answer– No. The Rules enable inter-State portability of registration and benefits, subject to
updation of migrant worker data on the destination State portal.
Question- Are appeals under the Rules time-bound?
Answer– Yes. The Rules prescribe clear limitation periods, standard appeal formats, and
timelines for disposal.
Question- Must crèche facilities always be located within the employer’s premises?
Answer– No. The Rules permit common crèches, shared or pooled arrangements, and
negotiated facilities, particularly to assist smaller establishments. Where crèche facilities are
not provided, payment of a crèche allowance is mandated.
Question-Are penalties imposed automatically for every non-compliance?
Answer- No. The Rules provide for notice, opportunity to comply, hearing, reasoned orders,
and compounding of offences before prosecution
Question-Is BOCW Welfare Cess payable only after completion of construction?
Answer- No. The Rules permit advance payment of cess based on self-assessment, with final
adjustment upon completion and assessment.
Question-Are inspections under the Rules routine and random?
Answer- No. The Rules emphasise risk-based inspections, corrective directions, and
compliance notices with defined timelines before initiating penal action.
Question-Are only direct engagements by aggregators covered?
Answer- No. The Rules cover gig and platform workers engaged through subsidiaries,
associate companies, holding companies, LLPs, and third-party arrangements.
Question-Do employers have unfettered discretion to reject gratuity claims?
Answer– No. The Rules prescribe mandatory notices, reasoned orders, defined timelines, and
appeal mechanisms, ensuring transparency and preventing arbitrary decisions.
Question-Does failure to update gig worker data permanently disqualify workers?
Answer- No. Non-updation leads to temporary ineligibility. Eligibility can be restored upon
updating required information on the designated portal.
Question- Can gratuity be claimed only after employment ends?
Answer-No. The Rules permit advance submission of gratuity applications where the date
of retirement or cessation of employment is known in advance.
Question- Is certification by a registered medical practitioner mandatory for maternity
benefits?
Answer– No. The Rules broaden acceptable proof and allow certificates from ASHAs, Auxiliary
Nurse Midwives (ANMs), local authorities, and other prescribed village or municipal
officials, in addition to registered medical practitioners.
