Code 2 of 4 · 2020

Code on Social Security 2020

Code on Social Security 2020 Explained

PF, ESI, Gratuity, Maternity Benefit, Employees Compensation, and 4 more acts consolidated into one social security framework with gig and platform worker coverage. Backed by factoHR.

9

Acts Replaced

Gig+

Platform Coverage

1-2%

Aggregator Fund

Direct Answer

The Code on Social Security 2020 merges 9 acts - PF, ESI, Gratuity, Maternity, and Employees Compensation - into one framework. Its key change: social security extended to gig and platform workers, with aggregator contributions and Aadhaar-based portability.

Acts Consolidated

9 central acts replaced by the Social Security Code

01

Employees Provident Funds and Miscellaneous Provisions Act 1952

02

Employees State Insurance Act 1948

03

Payment of Gratuity Act 1972

04

Maternity Benefit Act 1961

05

Employees Compensation Act 1923

06

Employment Exchanges (Compulsory Notification of Vacancies) Act 1959

07

Cine Workers Welfare Fund Act 1981

08

Building and Other Construction Workers Welfare Cess Act 1996

09

Unorganised Workers Social Security Act 2008

Key Changes

6 key changes Indian employers must prepare for

PF + ESI Unified

Provident Fund and ESI brought under one framework with simplified registration.

Gig + Platform Coverage

Gig and platform workers brought under social security for the first time in Indian law.

Social Security Fund

Aggregators contribute 1-2% of turnover to a Social Security Fund for gig workers.

Aadhaar Portability

Universal social security number linked to Aadhaar enables benefit portability across employers.

Gratuity for Fixed-Term

Fixed-term employees become eligible for gratuity after 1 year of service, down from 5 years.

Construction Cess

Building and construction workers welfare cess preserved and extended under unified framework.

Employer Impact

What changes for HR and payroll teams

01 Map gig and platform workforce. Identify aggregator activities triggering 1-2% turnover fund contribution.
02 Update gratuity eligibility logic: fixed-term employees now get gratuity after 1 year of service.
03 Align PF and ESI registrations under the simplified single-window regime.
04 Capture employee Aadhaar for universal social security number linkage.
05 Refresh maternity benefit policy to mirror Code provisions.
06 Set up construction cess workflow if your operations include builders or contractors.
Social security on autopilot

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PF + ESI unified

Gratuity automation

Gig fund contributions

Aadhaar portability

Other Codes

Explore the other 3 Labour Codes

Code on Wages 2019

Wages, bonus, equal remuneration.

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Industrial Relations 2020

Fixed-term, standing orders, unions.

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OSH Code 2020

Workplace safety, hours, contract labour.

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FAQs

Social Security Code 2020: common questions

What is the Code on Social Security 2020?

The Code on Social Security 2020 is a central labour code that consolidates 9 social security acts including the EPF Act 1952, ESI Act 1948, Payment of Gratuity Act 1972, Maternity Benefit Act 1961, and Employees Compensation Act 1923. It extends social security coverage to gig, platform, and unorganised workers for the first time.

How does the Code cover gig and platform workers?

The Code creates a separate Social Security Fund for gig and platform workers. Aggregators (Ola, Uber, Swiggy, Zomato, Urban Company, etc.) must contribute 1 to 2% of their annual turnover to this fund. Gig workers register via Aadhaar and become eligible for benefits like life and disability cover, accident insurance, and old-age protection.

What changes for gratuity under the new Code?

Fixed-term employees now become eligible for gratuity after just 1 year of continuous service, down from the 5-year threshold under the Payment of Gratuity Act 1972. This brings fixed-term employees on par with permanent employees for gratuity benefits.

Does the Code change EPF or ESI rates?

The Code does not change contribution rates. EPF stays at 12% employee + 12% employer on Basic + DA. ESI stays at 0.75% employee + 3.25% employer on gross up to Rs 21,000. Wage definition changes from the Code on Wages 2019 may affect the base wages used for these calculations.

When does the Code on Social Security take effect?

The Code was notified for effect in 2025 with state rules being progressively notified. Some provisions like gig worker registration and aggregator contributions have specific rollout timelines per state notifications.

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