Webinar #12 : Live Panel Discussion on Compulsory Insurance Gratuity Rules, 2024 scheduled on April 25th, 2024 @ 3:30PM | Register NOW!


September 19’ 20 Introduced in Lok Sabha
September 22’ 20 Passed by Lok Sabha
September 29’ 20 Published in E-Gazette
September 28’ 20 Assented by Hon President
September 23’ 20 Passed by Rajya Sabha

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

Trishaljeet Singh
Trishaljeet Singh

Published on: Oct 18, 2020

Sumit Kaushik
Sumit Kaushik

Updated on: Nov 28, 2022

(96 Ratings)


The Code on Social Security (CoSS), 2020 was introduced by withdrawing the earlier Code of 2019. It has amended and consolidated the laws relating to employee’s social security with the goal to extend social security assistance to all employees & workers either in organized or unorganized sector or any other sectors.

Social security mainly refers to protection measures provided to the workers or employees to ensure their healthcare and income security in case of certain contingencies such as old age, maternity, mishappening or accidents. The CoSS has vibrant provisions with respect to social security benefits and also amalgamates, simplifies & rationalizes the relevant provisions of the following 9 central labour legislations:

  • 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.


The definition of employees has been widened by the CoSS to include inter-state migrant workers, construction workers, film industry workers and platform workers. Few Key definitions are enumerated as under:

  • Employee: means any person (other than an apprentice engaged under the Apprentices Act, 1961) employed on wages by an establishment, either directly or through a contractor, to do any skilled, semi-skilled, unskilled, manual, operational, supervisory, managerial, administrative, technical, clerical or any other work, whether the terms of employment be express or implied, and also includes a person declared to be an employee by the appropriate Government, but does not include any member of the Armed Forces of the Union.
  • Employer: A person who employs any persons and specifically includes certain categories of workers
    • In the case of a factory, employer means the occupier of a factory, i.e., the person with ultimate control over the affairs of the company
    • The Code creates special provisions for certain classes of establishments such as factories, mines, dock workers and constructions workers. These include separate provisions on licenses, safety regulations, and duties of employers.
    • in relation to mine, the owner of the mine or agent or manager having requisite qualification under the law for the time being in force and appointed by the owner or agent of the mine
    • in relation to any other establishment, the person who, or the authority which has ultimate control over the affairs of the establishment and where the said affairs are entrusted to a manager or managing director, such manager or managing director
    • contractor; and
    • legal representative of a deceased employer.
  • Social Security: “Social Security” under the CoSS means the measures of protection afforded to employees, unorganised workers, gig workers and platform workers to ensure access to health care and to provide income security, particularly in cases of old age, unemployment, sickness, invalidity, work injury, maternity or loss of a breadwinner by means of rights conferred on them and schemes framed, under the CoSS.
  • Self-employed Workers: who are not employed by an employer, but engage in any occupation in the unorganized sector subject to monthly earning or hold cultivable land.
  • Home based Workers: means a person engaged in, the production of goods or services for an employer in his home or other premises of his choice other than workplace of the employer, for remuneration, irrespective of whether or not the employer provides the equipment, materials or other inputs.
  • Gig Worker: means a person who performs work or participates in a work arrangement and earns from such activities outside of traditional employer-employee relationship. e.g., the freelancers etc.
  • Platform Worker: means a person engaged in or undertaking platform work. For the exchange in payment such workers work outside traditional employer-employee relationship “organizations or individuals to use an online platform to access other organizations or individuals to solve specific problems or services or any such other activities which may be notified by the Central Government, in exchange for payment.
  • Aggregator: Aggregator means a digital intermediary or a market place for a buyer or user of a service to connect with the seller or the service provider.
  • Unorganised Sector: “Unorganised Sector” means an enterprise owned by individuals or self-employed workers and engaged in the production or sale of goods or providing service of any kind whatsoever, and where the enterprise employs workers, the number of such workers is less than 10.


The CoSS is far from being a mere consolidation of previous legislations or laws. It has enhanced the coverage, extended the benefits/advantages to all kind of workers in the organised/unorganised or any other sectors. It also introduced concepts of providing maximum benefits under a minimum governance and reflects uniformity in approach across the 4 labour codes existing as on date. The CoSS has expanded the scope of social security by providing for the registration of all types of workers including gig workers and platform workers. Gig worker is the new notion introduced in the CoSS. Gig workers are now also eligible for life and disability coverage, maternity benefits, pension. The CoSS brings the workers under the ambit of social security schemes, including life insurance and disability insurance, health and maternity benefits, provident fund and skill up-gradation, etc.

The CoSS has also targeted to promote the digitisation where all records and returns have to be maintained electronically. Digitisation of data will help in the exchange of information among various stakeholders/funds set up by the Government, which will ensure compliance and also facilitate the governance. Apart from the above significance the CoSS, it has brought in a facilitating approach by the authorities. Unlike the existing role of inspectors or officers, the CoSS provides for an enhanced role of inspector-cum-facilitator whereby employers can also look for support and advice from them to enhance the compliances.


We have encapsulated certain important provisions of the CoSS as under:

  • Employees’ Provident Fund (EPF)
    The CoSS brings some changes in the EPF scheme applicability which is now applicable to every establishment in which 20 or more employees are employed. The Central Government may establish a Provident Fund where the contributions paid by the employer to such fund shall be 10 % of the wages for the time being payable to each of the employees (whether employed by him directly or by or through a contactor), and the employee's contribution shall be equal to the contribution payable by the employer.
    Any employee so desires, can also contribute more than 10% of the wages, subject to the condition that the employer shall not be under an obligation to pay any contribution over and above 10%. provided that if Central Government may deem feet by notification the word 10 % substituted with the word 12 % at both the places.
  • Employees' State Insurance (ESI)
    Chapter 4 of the CoSS envisages the applicability of ESI Scheme. The ESI Scheme apply to every establishment in which 10 or more persons are employed other than a seasonal factory and the establishment which carries on hazardous or life-threatening occupation, in which even a single employee is employed and also on the employer of plantation who has opted for application of ESI. The CoSS also covers Gig workers and platforms workers under the ESI Scheme.
  • Payment of Gratuity
    Chapter 5 of the CoSS has fixed various thresholds with respect to eligibility for gratuity for permanent and fixed term employees. The provisions relating to gratuity are applicable to:
    • every factory, mine, oilfield, plantation, port and railway company; and
    • every shop or establishment in which 10 or more employees are employed, or were employed, on any day of the preceding 12 months; and
    • such shops or establishments as may be notified by the appropriate Government from time to time.
    Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than 5 years and for working journalist, gratuity is payable on termination of employment after a continuous service of 3 years.
    Completion of continuous service of 5 years shall not be essential where the termination of employment of any employee happens due to:
    • death or
    • disablement or
    • expiration of fixed term employment or
    • happening of any such event as notified by the Central Government.
  • Maternity Benefit
    Maternity benefits shall be applicable to every shop or establishment in which 10 or more employees are employed, or were employed, on any day of the preceding 12 months. The CoSS described for maternity benefit as under:
    • No woman shall work in any establishment during the 6 weeks immediately following the day of her delivery, miscarriage or medical termination of pregnancy.
    • The maximum period for which any woman shall be entitled to maternity benefit shall be 26 weeks of which not more than 8 weeks shall precede the expected date of her delivery.
    • A woman shall be entitled to maternity benefit if she has actually worked in an establishment of the employer from whom she claims maternity benefit, for a period of not less than 80 days in the 12 months immediately preceding the date of her expected delivery.
    • In addition to maternity benefit in terms of paid leaves, every woman is entitled to medical bonus of up to Rs. 3,500 if pre-natal confinement and post-natal care is not provided by her employer.
    • In case of miscarriage, or medical termination of pregnancy, a woman shall, be entitled to leave with wages at the rate of maternity benefit on production of such proof for a period of 6 weeks immediately following the day of her miscarriage or medical termination.
  • Benefits to Unorganised Worker, GIG Worker and Platform Workers
    The CoSS provides right to the Central and State Government to frame and notify the social security schemes for such workers on the matters related to life and disability cover, education, accident insurance, health and maternity benefits, old age protection, crèche. The schemes may be funded by the combination of Central Government, State Government, aggregators (@ not exceeding 2% but not less than 1% of the annual turnover of aggregator specified in the 7th Schedule), beneficiaries of the scheme, or funded from corporate social responsibility.
    The CoSS places an obligation on the Central Government to constitute the National Social Security Board for the welfare of the unorganised worker, gig workers and platform workers to recommend and monitor the schemes for such worker. The Central Government will setup and administer the social security fund for the welfare of such workers.
    The CoSS also gives the right to the government to setup free call helpline centres for such workers to disseminate information on available social security schemes, to facilitate filing, processing and forwarding of application forms for registration, to obtain registration, to facilitate the enrolment of the registered for the unorganised workers, gig workers and platform workers. This will encourage the youth to participate in such jobs and can avail the given benefits.
  • Social Security and Cess in Respect of Building and Other Construction Workers
    On every employer cess will be levied and collected for the purposes of social security and welfare of building workers at such rate not exceeding 2% per cent but not less than 1% of the cost of construction incurred by an employer, as the Central Government.
    The cost of construction shall not include the cost of land and any compensation paid or payable to an employee or his kin.
    The cess levied shall be collected from every employer undertaking building or other construction work in such manner and at such time, including deduction at source in relation to a building or other construction work of a Government or of a public sector undertaking or advance collection through a local authority where an approval of such building or other construction work by such local authority or such other authority notified by the State Government is required.
    Employer shall be liable to pay interest on the amount of cess not paid by the employer, for the period from the date on which payment is due till the amount is actually paid, at the rate as prescribed by the Central Government. The Government may, by notification, exempt any employer or class of employers in a State from the payment of cess, where such cess is already levied and payable under any corresponding law in force in that State.
    The employer shall, within 60 days or such period as may be notified by the Central Government of the completion of building and construction work, pay cess on the basis of his self-assessment, on the cost of construction.


The strength of implementing a legislation always lies in the ease of compliances as well as in the penalties that occlude non-compliance. The CoSS has captured all such provisions. It contains penal provisions in the case of failure to pay gratuity to the employees or a failure to pay the contributions towards EPF or ESI.


The Code on Social Security, 2020 is apparently a step in the virtuous direction from an ease of compliance and universality perspective as this code covers an enormous portion of our working population. The Code will help in increasing the employment opportunities by engaging workers on temporary basis as well and also providing them with the social security. A regulatory authority is separately administering the code and that would be beneficial to monitor the welfare of workers and it can better track the efficacy of schemes introduced under the code.

Comparative Chart - Earlier Vs New Provisions

S.No Earlier Provisions New Provisions
1 Definitions
  • Not Defined: Self-employed Worker, Fixed-term employment, Aggregator, Career Centre, Home-Based Worker, Unorganised Workers, Gig Worker & Platform Workers.
  • An “Employee” was not defined in Maternity Act, Cine Workers Act, Welfare Fund Act, Building and Other Construction Workers Welfare Cess Act & Unorganized Workers’ Social Security Act
  • New Definitions introduced under the Code of Social Security
  • New Definition of employee introduced, applicable on all the Laws covered under the Code of Social Security
2 Registration/ Cancellation of an Establishment was required under all the previous labour laws. If Establishment is registered under any existing Central Labour Laws, it is not required to obtain registration under Section 3 of the Code of Social Security.
3 No provisions existed for the formation of Social Security Organisations under all the previous labour laws. Section 4, The provisions enforce Constitution of Social Security Organizations for the administration of funds for the type of workers which have been added in the Code of Social Security.
4 No provisions were made for National Social Security Board and State Unorganized Workers’ Board under all the laboiur laws. Section 6, The provision enforces National Social Security Board and (State) Unorganized Workers’ Board to be formed by persons of eminence in the fields of labour welfare, management, finance, law and administration. It will also administer schemes for the welfare of gig workers and platform workers.
5 Rule-7 of EPF Appellate Tribunal (Procedure) Rules, no appeal by employer shall be entertained by the Tribunal unless it has deposited a Demand Draft payable in the Fund and bearing 75% of the amount due from him. Section 24, No appeal by the employer shall be entertained by the Tribunal unless it has deposited 25% of the amount due with Social Security Organization concerned.
6 No provision for Excessive Sickness Benefit existed in previous labour laws. Section 43, provides extra expenditure as sickness benefit for insanitary working conditions in the factory or in the accommodations due to the neglect of the owner.
7 No provisions for Schemes for unorganized workers, gig workers and platform workers in previous labour laws. Section 45, provides Employees State Insurance benefits to unorganized workers, gig workers and platform workers and their families.
8 Payment of Gratuity Act, the payment of gratuity term for a working journalist was for 5 years Section 53, the term for payment of gratuity has been reduced to three years for working journalists.
9 Funded Schemes for unorganized workers, gig workers and platform workers never occurred in labour laws. Section 109 & Section 114 framed welfare schemes for these workers at Central and State level on matters related to the protection of life, health, accident, education, skill upgradation, provision of old age home etc.
10 Helpline, facilitation centre for unorganized workers, gig workers and platform workers never occurred in labour laws. Section 112, provides for set up a toll free call centre or helpline to promulgate information on available social security schemes, process to file application for registration, to assist unorganized workers, gig workers and platform workers to obtain registration etc.
11 Only Inspectors were appointed to Inspect the Establishment. Section 122, states appointment of Inspector-cum-Facilitators for the inspection. This section also advices the employees and employers to be in compliance of this Code.
12 The provisions for maintaining registers, records and returns was not so extensive. 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 compensation; statutory deductions made by an employer from the wages of an employee; details as to cess paid in 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,
13 No limitation period was mentioned for determination of moneys due from an employer, under the EPF Act Section 125, In case of any dispute or proceedings for determination of dues from the employer, fixed the limitation period of proceedings and inquiry to be five years.
14 Inclusion of Enhanced punishment did not exist in previous labour laws.
  • 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 time which is punishable with:
    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)
15 No provision for Defer or Reduction of Contribution existed. Section 144, provides that the Central Government may by order, defer or reduce employer's contribution, or employee's contribution, or both for a period up to three months at a time, in the event of a pandemic, endemic or national disaster
16 Misuse of benefits did not have any separate provisions under the labour laws. Section 148, if any person has misused any benefit then the person will be deprived of such benefit where manner to ascertain misuse of any benefit will be specified in the Provident Fund Scheme or the Pension Scheme or the Insurance Scheme.


The information provided in this article is intended for general informational purposes only and should not be construed as legal advice. The content of this article is not intended to create and receipt of it does not constitute any relationship. Readers should not act upon this information without seeking professional legal counsel.

Tell us how helpful was this post?

Subscribe Newsletter Request a demo Contact Us