Social Security Code 2019

Prof R V Kadam
 What is Social Security
• "social security" means the measures of
protection afforded to employees,
unorganized workers, gig workers and
platform workers to ensure access to health
care and to provide income security,
particularly in cases of old age,
unemployment, sickness, invalidity, work
injury, maternity or loss of a breadwinner
 Employer
• "employer" means a person who employs, whether directly or through
any person, or on his behalf, or on behalf of any person, one or more
employees in his establishment and includes,—
• (a) in relation to an establishment which is a factory, the occupier of the
factory;
• (b) in relation to mine, the owner of the mine or agent or manager having
requisite qualification under the law for the time being in force and
appointed by the owner or agent of the mine as such;
• (c) in relation to any other establishment, the person who, or the
authority which has ultimate control over the affairs of the establishment
and where the said affairs are entrusted to a manager or managing
director, such manager or managing director;
• (d) contractor; and
• (e) legal representative of a deceased employer
 Introduction
• Nine Labour Laws related to Social Security
are consolidated under this Code.
1) Employees Compensation Act,1923
2) E.S.I. Act,1948
3) Employees Provident Fund & Misc.
Provisions Act,1952
4) Payment of Gratuity Act,1972
5) Maternity Benefit Act,1961
 Introduction
6) Employment Exchange Compulsory
Notification of Vacancies Act, 1959
7) Cine Workers Welfare Fund Act, 1981
8) Building & other Construction Workers’
Cess Act, 1996
9) Unorganised Workers Social Security Act,
2008
 E S I Act,1948
• It is important to mention here that it blossomed as the first
social security scheme in 1944, when the Govt. of the day was
still British.The first document on social insurance was "Report
on Health Insurance" submitted to the Tripartite Labour
Conference, headed by Prof. B.P.Adarkar, an eminent scholar
and visionary. Based on this report scheme was introduced.
• The scheme was inaugurated in Kanpur on 24th February 1952
(ESIC Day) by then Prime Minister Pandit Jawahar Lal Nehru.
• The scheme was simultaneously launched at Delhi and
Kanpur. The initial coverage was 1,20,000 employees. At
present total membership is 3.05 Crores.
 Contributions
• Contribution payable to the Corporation in respect of an employee shall
comprise of employer's contribution and employee's contribution at a
specified rate.
• Currently, the employee's contribution rate (w.e.f. 01.07.2019) is 0.75%
of the wages and that of employer's is 3.25% of the wages paid/payable
in respect of the employees in every wage period.
• Employees in receipt of a daily average wage upto Rs.137/- are
exempted from payment of contribution.
• An employer is liable to pay his contribution in respect of every
employee and deduct employees contribution from wages and shall pay
these contributions to the Corporation within 15 days of the last day of
the Calendar month
• The Corporation has authorized designated branches of the State Bank
of India and some other banks to receive the payments on its behalf.
 Contribution Period & Benefit Period
• Contribution period Corresponding Cash
Benefit period
• Contribution Period Cash Benefit Period
• 1st April to 30th Sept. 1st Jan to 30th June
• 1st Oct to 31st March 1st July to 31st Dec
 Benefits
(a) MEDICAL BENEFIT
: : Full medical care is provided to an Insured person and his family
members from the day he enters insurable employment. T Medical care is also provided
to retired and permanently disabled insured persons and their spouses on payment of a
token annual premium of Rs.120/- .
(b) SICKNESS BENEFIT(SB) : Sickness Benefit in the form of cash compensation at the rate of
70 per cent of wages is payable to insured workers during the periods of certified
sickness for a maximum of 91 days in a year. In order to qualify for sickness benefit the
insured worker is required to contribute for 78 days in a contribution period of 6 months.
• 1. Extended Sickness Benefit(ESB) : SB extendable upto two years in the case of 34
malignant and long-term diseases at an enhanced rate of 80 per cent of wages.
• 2. Enhanced Sickness Benefit : Enhanced Sickness Benefit equal to full wage is payable to
insured persons undergoing sterilization for 7 days/14 days for male and female workers
respectively.
(c) MATERNITY BENEFIT (MB) : Maternity Benefit for confinement/pregnancy is payable
for Twenty Six (26) weeks, which is extendable by further one month on medical advice
at the rate of full wage subject to contribution for 70 days in the preceding Two
Contribution Periods.
 Benefits
(d) DISABLEMENT BENEFIT
• Temporary disablement benefit (TDB) : From day one of entering insurable
employment & irrespective of having paid any contribution in case of employment
injury. Temporary Disablement Benefit at the rate of 90% of wage is payable so
long as disability continues.

• Permanent disablement benefit (PDB) : The benefit is paid at the rate of 90% of
wage in the form of monthly payment depending upon the extent of loss of
earning capacity as certified by a Medical Board
• (e) DEPENDANTS BENEFIT(DB) : DB paid at the rate of 90% of wage in the form of
monthly payment to the dependants of a deceased Insured person in cases where
death occurs due to employment injury or occupational hazards.

• (f) FUNERAL EXPENSES : An amount of Rs.15,000/- is payable to the dependents or

to the person who performs last rites from day one of entering insurable
employment.
 E S I Act,1948
• More & more workers i e workers from
Organised as well as Unorganised sectors are
brought under E S I Scheme thus enlarging
scope of the law.
• Extension of E S I Scheme in all 740 districts
which is at present covering 544 districts of
our country.
• For hazardous industry it is covered under E S I
scheme even it employs only one workman
 E S I Act,1948
• Even workers working in GIG industry like
OLA ,UBER or working on different online
platforms are covered under E S I Scheme
• Option is also given to the employers to cover
its employees under ESI scheme even they
have less than 10 employees.
 Provident Fund
(Membership)
• EPFO is one of the World's largest Social Security
Organisations in terms of clientele and the volume of
financial transactions . At present it has19.34 crore members.
• The Act is referred as the
Employees' Provident Funds & Miscellaneous Provisions Act,
1952
. The Act and Schemes framed there under are administered
by a tri-partite Board known as the Central Board of Trustees,
• The Board operates three schemes - EPF Scheme 1952,
Pension Scheme 1995 (EPS) and Insurance Scheme 1976
(EDLI)
 Employees Provident Fund
• All establishments employing more than 20
workers are covered under this Act.
• Option is also given to the establishments
employing less than 20 workers to get covered
under the Act.
• Even the Scheme is being developed to self
employed persons to join PF Scheme.
• Contract workers are also brought under
Scheme
 Employees Provident Fund
• The inspection under PF scheme is also made
easy. Inspector can check the records of last
5years. Earlier there was no such limit.
 Coverage
• Every employee employed in a factory or
Establishment is covered by the scheme and
not an excluded employee is required to
become the member of PF from the date of
joining.
• Excluded employee means
1) who has withdrawn PF amount
2) whose basic salary is above Rs.15000/-
 Contribution
• Contribution – 12% of Basic & DA (Employer
as well as Employee)
• Employer Contribution of 12% is divided in
two parts
- Contribution to Pension Fund 8.33% of
Basic.
- Remaining portion
 Nomination
• (1) Each member shall make in his declaration in Form 2, a nomination conferring
the right to receive the amount that may stand to his credit in the Fund in the
event of his death.
• (2) A member may in his nomination distribute the amount that may stand to his
credit in the Fund amongst his nominees at his own discretion.
• (3) If a member has a family at the time of making a nomination, the nomination
shall be in favour of one or more persons belonging to his family. Any nomination
made by such member in favour of a person not belonging to his family shall be
invalid.
• Provided that a fresh nomination shall be made by the member on his marriage
and any nomination made before such marriage shall be deemed to be invalid.
• (4) If at the time of making a nomination the member has no family, the
nomination may be in favour of any person or persons but if the member
subsequently acquires a family, such nomination shall forthwith be deemed to be
invalid and the member shall make a fresh nomination in favour of one or more
persons belonging to his family.
 Family
• "family" means all or any of the following relatives of an employee or an unorganised worker, as
the case may be, namely:—
• (a) a spouse;
• (b) a minor legitimate or adopted child dependent upon the employee or an unorganised
worker, as the case may be;
• (c) a child who is wholly dependent on the earnings of the employee or an unorganised worker,
as the case may be, and who is—
• (i) receiving education, till he attains the age of twenty-one years; and
• (ii) an unmarried daughter;
• (d) a child who is infirm by reason of any physical or mental abnormality or injury and is wholly
dependent on the earnings of the employee or an unorganised worker, as the case may be, so
long as the infirmity continues;
• (e) dependent parents (including father-in-law and mother-in-law of a woman employee),
whose income from all sources does not exceed such income as may be prescribed by the
Central Government;
• (f) in case the employee or an unorganised worker, as the case may be, is unmarried and his
parents are not alive, a minor brother or sister wholly dependent upon the earnings of the
Insured Person;
 National Data Base
• National data base is going to be created for all
employees working in unorganised sector
• All such workers will be registered under one
common portal
• The registration on the portal will be in the
form of self registration
• As such all workers working in unorganised
sector will get benefit of Social Security
Schemes
 National Data Base
• All establishments employing more than 20
workers will have to notify vacancies on this
portal.
 Gratuity
• Fixed Tenure employees will also get the
benefit of gratuity.
• The condition of minimum 5 years service is
removed. Even employee completing 1 year is
entitled for gratuity.
• For Journalists the condition of minimum 5
years service is reduced to 3 years.
 Gratuity
ELIGIBILITY
• (1) Gratuity shall be payable to an employee on the termination of his
employment after he has rendered continuous service for not less than five years,
—
• (a) on his superannuation; or
• (b) on his retirement or resignation; or
• (c) on his death or disablement due to accident or disease; or
• (d) on termination of his contract period under fixed term employment; or
• (e) on happening of any such event as may be notified by the Central Government:
• In case of working journalist , the minimum service is three years.
• The condition of completion of continuous service of five years is not necessary
where the termination of the employment of any employee is due to death or
disablement or expiration of fixed term employment
• In the case of death of the employee, gratuity payable to him is paid to his
nominee or, if no nomination has been made, to his heirs.
 Calculation of Gratuity

• (2) For every completed year of service or part

thereof in excess of six months, the employer pay
gratuity to an employee at the rate of fifteen days'
wages last drawn by the employee concerned
• In the case of a monthly rated employee, the
fifteen days' wages shall be calculated by dividing
the monthly rate of wages last drawn by him by
twenty-six and multiplying the quotient by fifteen.
 Forfeiture of Gratuity

• (a) the gratuity of an employee, whose services have been terminated

for any act, wilful omission or negligence causing any damage or loss
to, or destruction of, property belonging to the employer, shall be
forfeited to the extent of the damage or loss so caused;
• (b) the gratuity payable to an employee may be wholly or partially
forfeited—
• (i) if the services of such employee have been terminated for his
riotous or disorderly conduct or any other act of violence on his part,
or
• (ii) if the services of such employee have been terminated for any act
which constitutes an offence involving moral turpitude, provided such
offence is committed by him in the course of his employment.