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Chheda ConsultantsChheda ConsultantsSince 1972 · Labour law & payroll

No. 36 of 2020 · Assented 28 September 2020

The Code on Social Security, 2020

Provident fund, ESI, gratuity, maternity benefit, employee's compensation, and gig and platform workers.

164sections
14chapters
116gazette pages
Start reading Official PDF 42 government FAQs

In force since 21 November 2025

Chapters

  1. IPreliminaryThis chapter sets out where the Code applies, defines the terms used throughout it, and requires every covered establishment to register. Its definitions decide who counts as an employee, employer, gig worker or platform worker, and what counts as wages for PF, ESI and other benefits. It also says when an establishment comes under each Chapter, and that it stays covered even if its headcount later falls below the threshold.§1–332 minCap on excluded pay items before the excess counts as wages: 50% of total remuneration (or as notified by the Central Government)Factory headcount: 10 or more employees with power; 20 or more without power
  2. IISocial Security OrganisationsThis chapter creates the bodies that run social security under the Code: the Central Board of Trustees of the Employees' Provident Fund, the Employees' State Insurance Corporation, national and state boards for unorganised workers, and a welfare board for building and construction workers in every state. It sets who sits on each body, when a member is disqualified or removed, and when the government can take a body over. Employers and workers both have seats on these bodies, so this is where they get a say in how PF, ESI and welfare schemes are run.§4–1322 minEmployer representatives on the EPF Central Board: 10Nominated members on the National Social Security Board: 40
  3. IIIEmployees' Provident FundThis chapter sets up the provident fund system: the officers who run the EPFO, the three schemes (provident fund, pension and deposit-linked insurance) and how much employers and employees pay into them. It also covers PF for contract workers, priority of PF dues, which establishments are left out, transfer of PF on a job change, and appeals against EPFO orders on dues and damages.§14–2312 minEmployer PF contribution: 10% of wages (12% in establishments notified by the Central Government)Share of employer contribution sent to the Pension Fund: Up to 8⅓% of wages (or as notified by the Central Government)
  4. IVEmployees' State Insurance CorporationThis chapter runs the ESI scheme. It sets up the ESI Fund, makes the employer pay both the employer's and the employee's contribution, and lists the six benefits insured workers and their families get, from sickness and maternity pay to medical care and funeral expenses. It also decides when an accident or disease counts as an employment injury and sends ESI disputes to Employees' Insurance Courts, so it is the core of day-to-day ESI compliance.§24–5241 minDeposit before an employer disputes contributions or dues claimed by the Corporation: 50% of the amount claimed (the court may waive or reduce it)Time limit to start a case in the Employees' Insurance Court: 3 years from the cause of action
  5. VGratuityThis chapter decides when an employee gets gratuity, how much, and how fast the employer must pay it. It sets the five-year qualifying rule (waived on death, disablement, the end of a fixed term or a notified event), the default 15-days-per-year formula, how continuous service is counted, nominations, the 30-day payment deadline and compulsory insurance of the employer's gratuity liability. Gratuity is often a large exit cost, so getting the count of service and wages right matters to both sides.§53–5815 minMinimum continuous service: 5 years (3 years for working journalists)Gratuity per completed year: 15 days' wages, or another number of days the Central Government notifies (monthly-rated: last monthly wage ÷ 26 × 15)
  6. VIMaternity BenefitThis chapter gives a woman employee up to 26 weeks of paid maternity leave, paid by her employer at her average daily wage, plus a medical bonus, paid leave for miscarriage and related illness, nursing breaks and crèche access. It also protects her job: she cannot be dismissed, or have her service conditions worsened, because of maternity absence. For employers, it fixes who qualifies, how much is paid, when it is paid, and what must be displayed and disclosed.§59–7211 minMaximum maternity benefit: 26 weeksBenefit with two or more surviving children: 12 weeks
  7. VIIEmployee's CompensationThis chapter makes an employer pay compensation when an employee is hurt, disabled or killed in a work accident, or catches an occupational disease listed in the Code. It sets the formulas for death, permanent and temporary disablement, the deadlines for paying and claiming, and how disputes go to a competent authority instead of a civil court. Contractors' workers and commuting accidents are covered too, so the chapter reaches further than many employers expect.§73–9946 minDeath compensation: 50% of monthly wages × relevant factor (or the notified amount, if higher)Permanent total disablement: 60% of monthly wages × relevant factor (or the notified amount, if higher)
  8. VIIISocial Security and Cess for Building and Other Construction WorkersThis chapter makes employers carrying out building or other construction work pay a welfare cess of 1% to 2% of the cost of construction, at the rate the Central Government notifies, and sets out how that cess is collected, self-assessed, charged interest on, penalised and appealed. It also decides which construction workers get registered as beneficiaries of the State Building Workers' Welfare Board, and how the money in the welfare fund may be spent. It matters to builders and contractors because the cess is a direct cost on covered projects (the Code's definition of building or other construction work leaves out, among others, work related to a factory or mine, work employing fewer than ten workers, and an individual's own home costing up to Rs. 50 lakh), and to workers because registration is what gives them access to the Board's benefits.§100–1086 minCess rate on cost of construction: 1% to 2% (as notified)Time to self-assess and pay cess after completing a project: 60 days (or as notified)
  9. IXSocial Security for Unorganised Workers, Gig Workers and Platform WorkersThis chapter requires the Central and State Governments to frame welfare schemes for unorganised workers, and lets the Central Government frame schemes for gig and platform workers. A worker aged 16 or above (or such age as the Centre prescribes) registers by self-declaration and an application that includes the Aadhaar number, and a registered worker is eligible for these benefits. Aggregators in the categories listed in the Seventh Schedule can be made to contribute at a rate the Centre notifies, between 1% and 2% of annual turnover, capped at 5% of what they pay or owe these workers.§109–1147 minMinimum age to register (unless the Centre prescribes another age): 16 yearsBand for the aggregator contribution rate (the exact rate is notified by the Centre), as a share of annual turnover: 1% to 2%
  10. XFinance and AccountsThis chapter sets the money rules for the Social Security Organisations that run benefits under the Code, such as the Central Board (provident fund) and the Corporation (ESIC). They must keep proper accounts, be audited by the CAG every year, get their yearly budget approved by the government, and send an annual report to the government, which lays it with the budget and audited accounts before Parliament or the State legislature. It also requires regular valuations of every fund, including funds kept by establishments, and sets the framework for investing, borrowing and writing off unrecoverable dues, with the details left to government rules and the schemes.§115–1215 minCAG audit of accounts: Every yearBudget for the following year: Framed every year
  11. XIAuthorities, Assessment, Compliance and RecoveryThis chapter sets up the Inspector-cum-Facilitators who advise and inspect, and lists the records and registers every employer must keep, along with the notices, wage slips and returns it must display, issue and file. It lets PF and ESI officers decide coverage disputes and work out the dues an employer owes. It then sets out how unpaid amounts grow through interest and damages, and how they are recovered, from attaching property and bank money to arresting the employer.§122–13224 minTime limit to start a PF/ESI dues or coverage case: 5 yearsTarget to finish the inquiry: 2 years (extendable by up to 1 year)
  12. XIIOffences and PenaltiesThis chapter lists the offences under the Social Security Code and the punishment for each, from fines for missed returns to jail for not depositing contributions. It also sets out who in a company can be prosecuted, the chance an employer gets to fix a lapse before prosecution, and how certain first offences can be settled (compounded) by paying part of the maximum fine. It matters because keeping back employee contributions already deducted from wages carries a minimum one-year jail term, which a court can lower only for special reasons it records, and repeat defaults are punished far more harshly.§133–13810 minJail for not paying deducted employee contribution: 1 to 3 years + ₹1 lakh fineJail for other contribution defaults: 2 to 6 months + ₹50,000 fine
  13. XIIIEmployment Information and MonitoringThis chapter lets the government require employers to report job vacancies to a career centre before filling them, and lets it set how employers file returns with that centre. Reporting does not oblige the employer to hire through the centre. Small non-government establishments, jobs shorter than 90 days and several other categories are left out.§139–1402 minHeadcount below which a non-government establishment is excluded: Fewer than 20 employees (or as notified by the Central Government)Job duration below which a vacancy is excluded: Less than 90 days
  14. XIVMiscellaneousThis chapter holds the Code's general machinery: Social Security Funds for unorganised, gig and platform workers, Aadhaar-based identity checks, the government's power to exempt establishments or defer contributions, and the powers to make rules, regulations and schemes. It also shields workers' fund balances from attachment, makes the buyer of a business share the seller's unpaid dues, keeps any more favourable benefit a worker already has, and repeals the nine old social security Acts.§141–16436 minInitial period of an exemption: 3 years from the notification; extendable for a period prescribed by Central Government rules (for PF, Pension and Insurance Schemes, as the schemes specify)Period for which PF/ESI contributions can be deferred or cut in a pandemic, endemic or national disaster: Up to 3 months at a time

Schedules

The First ScheduleFirst Schedule: ApplicabilityThe Second ScheduleEmployees Covered for Employee's CompensationThe Third ScheduleList of Occupational DiseasesThe Fourth ScheduleInjuries Deemed to Cause Permanent DisablementThe Fifth ScheduleMatters That May Be Provided for in the SchemesThe Sixth ScheduleFactors for Lump Sum Compensation on Death and Permanent DisablementThe Seventh ScheduleClassification of Aggregators
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