Draft Code on Social Security, 2019

The draft code amalgamates eight laws. It includes Employees Provident Fund and maternity benefits. The code was published by the Ministry of Labor and Employment.

4 major codes

The code on social security will combine 44 labor laws into 4 codes. They are wages, occupational safety, working conditions and health.

Unorganized Sector

According to the code, the central government will formulate suitable welfare schemes for unorganized workers on matters related to old age protection, health and maternity benefits, life and disability, etc. The code also says that the government will formulate and notify schemes for unorganized workers on matters related to housing, educational benefit, provident fund, funeral assistance, employee injury benefit.

A large part of the Indian labor force is in informal sector. The move looks forward. However, most of the key initiatives may be decided by the states with a very little contribution from the center.

The draft includes the gig workers as well in the wake of California approving law for protection for gig workers on 18th September 2019. The law included taxi aggregating companies as well.

Maternity benefits

The draft says that every woman is entitled to the payment of maternity benefit for the period of her actual absence. It includes the period immediately preceding the day of her delivery and the period immediately following her delivery. She is eligible for average daily wages. This means wages payable to her for the days she had worked during 3 months preceding the day of her absence.

Laws to be merged by the code

The code is to merge the following 8 laws

  • Employees Compensation act, 1923
  • Employees State Insurance act, 1948
  • Employees Provident Funds and miscellaneous provisions act, 1952
  • Maternity Benefit act, 1961
  • Payment of Gratuity act, 1972
  • Cine workers welfare fund act, 1981
  • Building and Other construction workers Cess act, 1996
  • Unorganized Workers Social Security act, 2008

Corporatization

The insurance, pension and retirement bodies will now become body corporate. This will bring in departure from the autonomous body structure that is currently in operation. According to the draft, CEOs will be appointed. Hence, the labor minister, secretaries, commissioners and directors may not be the head of these organizations.

The draft intends to structure the EPFO with its entire Rs 11 trillion corpus under a central government appointed chairman. Currently, it is headed by the labor minister.

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