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 last week.In this part, we will discuss the Code on Social Security 2020, and the major changes brought by it.The Code on Social Security, 2020The Code consolidates nine different central laws :The Employees Provident Fund and Miscellaneous Provisions Act, 1952 The Employees State Insurance Act Act, 1948 The Maternity Benefit Act,1961 The Building and other Construction Workers Cess ActThe Payment of Gratuity Act, 1972 The Employees Exchange (Compulsory Notification of Vacancies) Act, 1959The Cine Workers Welfare Fund Act, 1981 The Unorganized Workers' Social Security Act, 2008Employees Compensation Act, 1923The Code repeals the above enactments.Gig workers, Platform workers, unorganized workers made eligible for welfare measuresA notable feature of the Code is that it extends the protection of welfare measures to 'gig workers', 'platform workers' and 'unorganized workers'.The Code defines "gig worker" as a person who performs work or participates in a work arrangement and earns from such activities outside of traditional employer-employee relationship (Section 2(35). This will cover those who work as delivery persons for online food delivery platforms, e-commerce sites etc.'Platform worker' is a person who has a work arrangement outside of a traditional employer-employee relationship in which organisations or individuals use an online platform to access other organisations or individuals to solve specific problems or to provide specific services or any such other activities which may be notified by the Central Government, in exchange for payment(Section 2(60))."Unorganised worker" means a home-based worker, self-employed worker or a wage worker in the unorganised sector and includes a worker in the organised sector who is not covered by the Industrial Disputes Act, 1947 or Chapters III to VII of the Code(Section 2(86)).The Code mandates that the Central Government should frame a scheme for the welfare of these classes of employees in relation to (i) life and disability cover; (ii) health and maternity benefits; (iii) old age protection; (iv) education; and (v) any other benefit as may be determined by the Central Government (Chapter IX).Also, the State Governments are mandated to frame shceme for these employees in relation to (i) provident fund; (ii) employment injury benefit; (iii) housing; (iv) educational schemes for children; (v) skill upgradation of workers; (vi) funeral assistance; and (vii) old age homesEvery unorganised worker, gig worker or platform worker shall be required to be registered under the Code provided that the person has completed 16 years of age. Aadhaar number is mandatory for such registration.Role of aggregators: The Code states that schemes for gig workers and platform workers may be funded through a combination of contributions from the central government, state governments, and aggregators, who are listed in Schedule 7. The Schedule lists nine categories including ride-sharing services, food and grocery delivery services, content and media services, and e-marketplaces. Any contribution from such an aggregator may be at a rate notified by the government falling between 1-2% of the annual turnover of the aggregators. However, such contribution cannot exceed 5% of the amount paid or payable by an aggregator to gig workers and platform workers. Definition of 'wages' revised : Section 2(88)The Code says that all remuneration (in monetary terms), whether by way of salaries, allowances, or otherwise, would form part of wages and also includes basic pay, dearness allowance, and retaining allowance. The components excluded for calculation of wages under the Code are bonus not forming part of remuneration, house rent (or the value of living accommodation), provident fund, commission to the employee, overtime allowance, and conveyance allowances, where the aggregate amount paid under these heads does not exceed 50 percent of the total remuneration being paid to the employee. the total excluded components should not exceed 50% of the total remuneration. The third part of the definition provide limit as the definition very clearly specifies the list of exclusions so anything which is paid to the employees other than the exclusion would be covered and within this specific exclusion the limit cannot be more than 50%.Definition of 'inter-state migrant worker' expanded to include self-employed persons : Section 2(41)Apart from a migrant worker recruited through a contractor, the defnition of 'inter-state migrant worker' includes a person who has come on his own from one State and obtained employment in an establishment of another state.The definition covers workers drawing wages not exceeding eighteen thousand rupees per month or such higher amount as may be notified by the Central Government from time to time.EPF applicable to all establishments with 20 or more employees : First...

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

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