Labour Minister Santosh Gangwar on December 11 introduced in Lok Sabha a Bill to amend and consolidate nine laws relating to social security of employees. Notably, the bill allows workers in some sectors, who contribute to the Employees’ Provident Fund (EPF), to increase their take-home salary
Differential EPF rates
The Code on Social Security, 2019 seeks to enable the central government to fix provident fund contributions (PF) to be made by employees in different sectors and provides for payment of gratuity to fix-term employees. In nutshell, the bill allows the government to notify sectors where a lower/differential rate of contribution can be applicable.It will also empower the central government to exempt certain establishments from all or any of the provisions of the proposed code.
Gratuity payment
The bill proposes payment of gratuity in case of fixed term employment on a pro-rata basis even if the contract is for less than five years. At present, gratuity is paid to workers completing at least five years of continuous service and does not differentiate between regular and contractual employees.
A special welfare scheme for unorganised workers is also provided for in the bill. These includes life and disability cover, health and maternity benefits, old age protection, education, and housing. The bill, if passed, will call on state governments to formulate and notify suitable welfare schemes for unorganised workers, including schemes relating to provident fund, employment injury benefit, housing, educational schemes for children, skill up gradation of workers, funeral assistance and old age homes.
Unorgainsed workers
The code also empowers the Center to frame social security schemes and to create social security funds for unorganised workers and provides for compensation for employees in case of accidents while commuting from residence to place of work and vice versa.
It makes Aadhaar mandatory for availing benefits under various social security schemes.
The Code on Social Security will subsume nine Central Labour Acts namely 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 Unorganized Workers Social Security Act, 2008 and Employment Exchanges (Compulsory Notification of Vacancies) Act 1959.
Moving the bill, Gangwar said the code seeks to consolidate laws relating to social security of workers and subsume nine central laws.
He also told the House that the code is part of larger exercise of the government to codify 44 labour laws into four broad codes on wages, occupational safety, industrial relations and social security.