Code On Social Security, 2020 – Highlights

CODE ON SOCIAL SECURITY, 2020
HIGHLIGHTS OF THE CHANGES PROPOSED

 

PROVIDENT FUND (PF)

The Chapter III concerning the PF shall apply to an establishment employing 20 or more employees(industry-specific applicability withdrawn)

2  There is no wage ceiling for PF employee   coverage

3   Limitation period is introduced as 5 years for the institution of PF proceedings

4   The Central Govt., may specify differential rates and period for any class of employees

 

GRATUITY

1  Working journalist shall be entitled to gratuity even if they have completed 3years of service

2   Completion of 5years service not necessary in  case of fixed-term employees

3  Not required to pay interest for the delay in payment of gratuity if the delay is due to the fault of the employee and there is written permission from the controlling authority

4   The CA firms could go out of the purview of the chapters concerning the Maternity benefit as the term “any law for the time is being in force apply is removed for shops and establishments coverage

 

EMPLOYMENT EXCHANGES

1  Employment exchanges transforming into centers

2. The threshold limit changed to 20 or more   (From 25 or more) for the applicability

 

EMPLOYEES STATE INSURANCE (ESI

1 Chapter IV concerning Employees State Insurance (ESI shall apply to establishments employing 10 or more employees

2 The Banks and mines also are covered under the ESI provided if the required number of employees are employed therein

3    The Chapter IV (i e., ESI shall apply to all the establishments engaged in hazardous or life-threatening occupation even if a single employee is employed

4    Plantations may also be covered under the ESI on a voluntary basis

5    If   the   employer   fails   to register/pay contributions ESI will extend the benefits but recover the cost of such benefit from the employer

 

MATERNITY BENEFIT

1 The crèche shall be provided if 50 or more employees are employed (irrespective of whether such establishment is covered under ESI or not

2 Maternity benefits or medical bonus or both can be deprived if a woman is dismissed or discharged   for   any   gross    misconduct   as prescribed by the Central Govt.,

3    The CA firm could go out of the purview of the chapters concerning the Maternity benefit as the term “any law for the time is being in force apply” is removed for shops and establishments coverage

 

EMPLOYEES COMPENSATION

1    The appropriate Govt., definition is    now available for the purpose of employee’s compensation too

2     If death or injury is caused to any worker or a member of his family as a result of the collapse of a house provided by the employer in a plantation and the collapse is not solely and directly attributable to a fault on the part of any occupant  of the house or to a natural calamity

3       The employer shall be liable to pay compensation under section 76 and the Sixth Schedule so far as maybe

4    Funeral Expenditure – Rs 15000/ –

 

BUILDING AND OTHER CONSTRUCTION WORKERS

  1. The building and construction work shall not include the construction work carried   out  in the factory or mine
  2. The building and construction work shall not include construction work carried out for a residential purpose and  if the cost of such construction is less  than 50Lakhs (Currently it is 10 Lakhs)

OTHER CHANGES

1    For the purposes of counting of employees for the coverage of an  establishment under  PF & ESI the employees  whose  wages are more than the wage ceiling so notified by the Central Government shall also be taken into account

2    Fixed-term employee shall be eligible for all benefits under any       law for the time being in force available to a permanent employee proportionately according to the period of service rendered by him

3     For fixed-term employees hours of work wages allowances and other benefits shall not be less than that of a permanent employee doing the same work or work of a similar nature

4     The Central Govt., would become appropriate Govt., for telecommunication insurance and banking companies (Liability to send notification of vacancies and submission of returns

5     In relation to an establishment having departments or branches in more than one State Central Government would be the appropriate Government (There will be an impact under Gratuity Maternity Benefit and Employment Exchange chapters)

6     Plantation definition – if   10 or more persons are employed and 5 hectares or more (Current Act 15 or more persons)

7     The apprentices engaged under the Apprentices are alone excluded from the definition of the term employee

8     Central Govt., to frame schemes for providing social security to gig workers and platform workers

9    Central Govt., to constitute a social security fund for unorganized/ gig/ platform workers or such class of persons

10 The role of Inspector is changed to inspector cum facilitator

To provide a penalty for different types of violations commensurate with the gravity

Aadhaar mandatory for seeding at the time of registration of member or beneficiary

3 Major change in the definition of ‘wages (Employers liability may go up for the purpose of PF and gratuity and it may get reduced for the purpose of ESI and Maternity benefit

4 There is an increase in Penalty in case of violation of the provisions of this code

5 Provision for compounding of offense is introduced

6 Prior to prosecution Opportunity to be provided to the employer for corrective action

 

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Consultation and Audit Services

 

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