Labour Code on social security tabled in Lok Sabha

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Published: December 12, 2019 4:50:23 AM

The Code also provides an enabling provision for constituting special purpose vehicles for the implementation of the schemes for unorganised sector workers. It also seeks to expand the sources of the fund for various schemes under the Code to include funds from corporate social responsibility.

Labour Code, social security, tabled, Lok Sabha, economy news, EPF  benefits, EPF The Code will make Aadhaar mandatory for seeding at the time of registration of member or beneficiary or any other person to register or for receiving benefits.

The Code on Social Security, 2019, introduced in the Lok Sabha on Wednesday, proposed universalisation of social security benefits for the country’s around 50 crore workforce with a host of offerings such as medical, pension, death and disability benefits to them.

The unorganised sector, which accounts for a little over 80% of the country’s total workforce, has largely been out of the social security schemes as well as the ambit of the labour regulations at present.

Labour Code, social security, tabled, Lok Sabha, economy news, EPF  benefits, EPF

 

The Code also provides an enabling provision for constituting special purpose vehicles for the implementation of the schemes for unorganised sector workers. It also seeks to expand the sources of the fund for various schemes under the Code to include funds from corporate social responsibility.

The Code empowers the central government with an enabling provision to change (read lower) the mandatory monthly contribution towards employees provident fund (EPF) for a certain class of employees for a certain period. Employers will, however, have to contribute to the retirement fund at the existing rate. This will help increase the take-home pay of workers with relatively lower salaries.

Under the present law, it is mandatory for units employing 20 or more persons to provide EPF benefits to workers. While employees contribute 12% of the basic pay to EPF, the employer contributes 8.33% towards the employees’ pension scheme and 3.67% to the EPF itself. Additionally, employers also pay 0.5% towards EDLI, 0.65% as EPF administrative charges and 0.01% as EDLI handling fee, taking the total contribution to 13.61%.

The Bill also empowers the Centre to frame schemes for providing social security to the gig workers and platform workers who do not fall under the traditional employer-employee relation. It also provide for payment of gratuity in case of fixed-term employment on pro-rata basis even if the period for fixed term contract is less than five years. Under the current Act, an employee is entitled for gratuity only after completing five years of continuous service.

The Bill also provides for maternity benefit to the woman employees and compensation to the employees in case of the accidents while commuting from residence to place of work and vice-versa.

The Bill, moved by labour minister Santosh Gangwar, seeks to consolidate the laws relating to social security of workers and subsume nine extant Acts such as 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 and Unorganised Workers Social Security Act, 2008.

“Widening the scope of the benefits to the fixed-term employees and facilitating the case of compliance of labour laws would be a big step towards equity and promote setting up of more enterprises thus catalysing the creation of employment opportunities,” the statement on objects and reasons of the Bill said.

The Code will make Aadhaar mandatory for seeding at the time of registration of member or beneficiary or any other person to register or for receiving benefits.

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