The recently implemented Social Security Code (SS Code) 2020 has sparked debate regarding its effectiveness in assisting the informal workforce. Complementing this, two other codes, namely, the Code on Occupational Safety, Health & Working Conditions Code and the Industrial Relations Code were approved in 2020. The SS Code 2020 consolidates nine regulations linked to social security, retirement, and employee perks.
Significant Provisions of SS Code 2020
One of the pivotal attributes of the SS Code 2020 is Enhanced Coverage. The Code expands coverage by encapsulating the unorganised sector, fixed-term employees, gig workers, platform workers, inter-state migrant laborers, and more.
National Database and Registration
The Code aims to develop a comprehensive national database for the unorganised sector workers. It mandates the online registration of all these workers via a simple self-certification process. Moreover, all records and returns need electronic upkeep.
Social Security Fund
The Code also introduces a Social Security Fund to create financial resources for implementing social security schemes.
Uniform Definitions
The SS Code 2020 brings consistency in determining wages for calculating social security benefits. It defines wage extensively, adding specific exclusions with ceilings to prevent inappropriate salary structuring that minimises social security benefits.
Consultative Approach
Authorities adopt this approach to facilitate employers. The Code offers a supportive role for inspector-cum-facilitators, encouraging employers to enhance compliances.
Career Centre
Under the new code, Career Centers will be established to ensure the demand for human resources is met and to monitor employment information.
Stringent Penalties
The code includes strict penalties like a fine of Rs. 1,00,000 and imprisonment for one to three years for failure to deposit employee contributions.
Concerns Regarding the SS Code 2020
The responsibility of registering as beneficiaries lies with the informal workers, who may lack digital literacy, connectivity, and awareness about social security schemes.
Lack of Inter-State Arrangement and Cooperation
As unorganised workers are widespread across India, the implications of this code would be too varied across states for effective administration.
Complicated Processes & Overlapping Jurisdiction
The goal of providing adequate social security cover for the unorganised workforce gets diluted due to procedural convolutions at the Centre-State level and issues of jurisdictional or institutional overlap.
Maternity Benefit Misstep
Women working in the unorganised sector remain excluded from the maternity benefit.
Inaccessible Employees Provident Fund
Despite the new code, access to the employees’ provident fund remains unattainable for informal sector workers.
Payment of Gratuity: The Anomaly
Though the provision of gratuity payment has been expanded in the new Code, it still largely remains inaccessible for a significant portion of informal workers.
Way Forward
While the SS Code 2020 attempts to include informal workers within its purview, comprehensive social security remains a distant dream. Employers need to shoulder the responsibility of offering social security to their workers. While the state plays a crucial role, employers bear the primary responsibility as they benefit from the workers’ productivity.
