Highlights on the Social Security Code, 2019

The Social Security Code, 2019 has replaced the previous laws namely The Employees’ Provident Fund Act, 1952, The Maternity Benefit Act, 1961 and The Unorganized Workers’ Social Security Act, 2008.

Social security schemes:

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. 

Coverage and registration:

It specifies different applicability thresholds for the schemes.  For instance, the EPF Scheme will apply to establishments with 20 or more employees. Schemes namely EPF, EPS, EDLI, and ESI will be financed through a combination of contributions from the employer and employee.

Social security organisations:

As specified in the Code various Social security organisations shall be established. These include:

  • a Central Board of Trustees, headed by the Central Provident Fund Commissioner, to administer the EPF, EPS and EDLI Schemes
  • an Employees State Insurance Corporation, headed by a Chairperson appointed by the central government, to administer the ESI Scheme,
  • national and state-level Social Security Boards, headed by the central and state Ministers for Labour and Employment, respectively, to administer schemes for unorganised workers, and
  • state-level Building Workers’ Welfare Boards, headed by a Chairperson nominated by the state government, to administer schemes for building workers.

Inspections and appeals:

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.

Offences and penalties:  

Penalties for various offences has been defined such as

  • 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
  • Falsification of reports, punishable with imprisonment of up to six months.
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