Social Security Code, 2019 

#GS2 #Polity&Governance  

The Parliamentary Committee on Labour has, in its latest report, recommended that the eligibility period for gratuity payable to an employee on termination of his employment should be reduced to one year from the present provision of five years. The Committee made this recommendation in its report on Social Security Code, which has been evolved subsuming nine Central Labour laws. 

Other recommendations  

  • It has also recommended that this facility be extended to all kinds of employees, including contract labourers, seasonal workers, piece rate workers, fixed term employees and daily/monthly wage workers. 
  • The committee has stressed that there should be a robust redressal mechanism in case an employer does not pay up the dues. 
  • The panel has recommended that the Social Security Code should have provisions to hold the employer liable for payment of gratuity to the employees within a stipulated time frame. 
  • The Committee also flagged the concern that the threshold limit of 20 or more employees for EPFO registration can be used by the employers to exclude themselves from EPFO coverage. The Committee recommended that possibilities be explored to make the EPF Act applicable to all the workers, including self-employed. 
  • The panel has recommended that the social security code should empower the Central government to reduce the employee’s contribution to EPF in exceptional circumstances like disasters in terms of the Disaster Management Act, including pandemics, because this would enable the Government to provide relief to the affected persons in COVID-19 like pandemics. 

About Code on Social Security, 2019 

  • Social security refers to measures to ensure access to health care and provision of income security to workers. 
  • The Code replaces nine laws related to social security, including the Employees’ Provident Fund Act, 1952, the Maternity Benefit Act, 1961, Payment of Gratuity Act, 1972 and the Unorganised Workers’ Social Security Act, 2008. 
  • Under the Code, the central government may notify various social security schemes for the benefit of workers. These include an Employees’ Provident Fund (EPF) Scheme, an Employees’ Pension Scheme (EPS), and an Employees’ Deposit Linked Insurance (EDLI) Scheme. These may provide for a provident fund, a pension fund, and an insurance scheme, respectively.  The government may also notify: (i) an Employees’ State Insurance (ESI) Scheme to provide sickness, maternity, and other benefits, (ii) gratuity to workers on completing five years of employment (or lesser than five years in certain cases such as death), (iii) maternity benefits to women employees, (iv) cess for welfare of building and construction workers, and (v) compensation to employees and their dependants in the case of occupational injury or disease. 
  • In addition, the central or state government may notify specific schemes for gig workers, platform workers, and unorganised workers to provide various benefits, such as life and disability cover. Gig workers refer to workers outside of the traditional employer-employee relationship. Platform workers are workers who access other organisations or individuals using online platforms and earn money by providing them with specific services. Unorganised workers include home-based and self-employed workers. 
  • The Code provides for the establishment of several bodies to administer the social security schemes. 
  • The appropriate government may appoint Inspector-cum-facilitators to inspect establishments covered by the Code, and advise employers and employees on compliance with the Code. 
  • The Code specifies penalties for various offences, such as: (i) the failure by an employer to pay contributions under the Code after deducting the employee’s share, punishable with imprisonment between one and three years, and fine of one lakh rupees, and (ii) falsification of reports, punishable with imprisonment of up to six months. 
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