The code on social security, 2020- Important highlights

The code on social security, 2020- Important highlights


The Code on Social Security (CoSS), 2020 was introduced by withdrawing the earlier Code of 2019. It has amended and consolidated the laws relating to employee’s social security with the goal to extend social security assistance to all employees & workers either in organized or unorganized sector or any other sectors.

Social security mainly refers to protection measures provided to the workers or employees to ensure their healthcare and income security in case of certain contingencies such as old age, maternity, mishappening or accidents. The CoSS has vibrant provisions with respect to social security benefits and also amalgamates, simplifies & rationalizes the relevant provisions of the following 9 central labour legislations:

  • The Employees’ Compensation Act, 1923
  • The Employees’ State Insurance Act, 1948
  • The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952
  • The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959
  • The Maternity Benefit Act, 1961
  • The Payment of Gratuity Act, 1972
  • The Cine Workers Welfare Fund Act, 1981
  • The Building and Other Construction Workers Welfare Cess Act, 1996
  • The Unorganised Workers’ Social Security Act, 2008.

Key points of the Code:

  • Enhanced coverage of provisions by including Inter-State Migrant, Gig workers, Fixed term employees and all sectors of establishments
  • National database of Online portals by making the Registration procedure simple and at single platform
  • Electronic database to maintain all records and returns
  • Uniformity in definition of Wages, Employer, Home based workers, Self-employed workers etc.
  • Introducing provisions for Social Security Organization to maintain finance and accounts and frame a budget as well
  • The EPF, EPS, and ESI schemes will be financed through contributions from the employer and the employee. In case of EPF, the employer and the employee each will make contributions of 10% of wages
  • Provides procedure for re-employment of retrenched workers.

Penal Provisions

The strength of implementing a legislation always lies in the ease of compliances as well as in the penalties that occlude non-compliance. The CoSS has captured all such provisions. It contains penal provisions in the case of failure to pay gratuity to the employees or a failure to pay the contributions towards EPF or ESI.


The Code on Social Security, 2020 is apparently a step in the virtuous direction from an ease of compliance and universality perspective as this code covers an enormous portion of our working population. The Code will help in increasing the employment opportunities by engaging workers on temporary basis as well and also providing them with the social security. A regulatory authority is separately administering the code and that would be beneficial to monitor the welfare of workers and it can better track the efficacy of schemes introduced under the code.