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Code on Social Security, 2020 

Posted On - 8 May, 2026

These FAQs have been prepared to provide clarity on key aspects of the Code on Social Security, 2020 (“SS Code” or “Code”) (effective from November 21, 2025) and the Social Security (Central) Rules, 2026 (effective from May 8, 2026) (“SS Rules”). These FAQs are intended to serve as a practical guide for employers, HR professionals and industry stakeholders navigating the evolving wage law framework in India.   

1. What is the Code on Social Security, 2020 and what is its primary objective? 

The SS Code is a central legislation that consolidates 9 (nine) pre-existing labour laws relating to social security into a single, unified framework. It came into force on 21 November 2025, bringing together fragmented social security obligations under one statute. 

The primary objective of the SS Code is to extend universal social security coverage for all categories of workers including organised, unorganised, gig, and platform workers, thereby simplifying employer compliances by harmonising definitions, contribution frameworks, and enforcement mechanisms across previously separate legislations.  

2. Which erstwhile laws have been subsumed into the Code on Social Security, 2020? 

The SS Code consolidates and repeals the following 9 (nine) central legislations: 

  1. Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 
  2. Employees’ State Insurance Act, 1948  
  3. Maternity Benefit Act, 1961  
  4. Building and Other Construction Workers’ Welfare Cess Act, 1996  
  5. Payment of Gratuity Act, 1972  
  6. Employees’ Compensation Act, 1923  
  7. Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959  
  8. Unorganised Workers’ Social Security Act, 2008  
  9. Cine-workers Welfare Fund Act, 1981

3. Which erstwhile rules have been subsumed into the Social Security (Central) Rules, 2026?  

The SS Rules consolidates and repeals the following 12 (twelve) central rules:  

  1. Employee‘s Compensation Rules, 1924;  
  1. Employee‘s Compensation (Transfer of Money) Rules, 1935;  
  1. Employees‘ State Insurance (Central) Rules, 1950;  
  1. Employment Exchanges (Compulsory Notification of Vacancies) Rules, 1960;  
  1. Maternity Benefit (Mines and Circus) Rules, 1963;  
  1. Payment of Gratuity (Central) Rules, 1972;  
  1. Cine-Workers Welfare Fund Rules, 1984;   
  1. Employee‘s Compensation (Venue of Proceedings) Rules, 1996;    
  1. Tribunal (Procedure) Rules, 1997;   
  1. Employees‘ Provident Funds Appellate Tribunal (Conditions of Service) Rules, 1997;  
  1. Building and other Constructions Workers‘ Welfare Cess Rules, 1998; and   
  1. Unorganised Workers‘ Social Security Rules, 2009.  

4. How is the term “wages” defined under the SS Code and why is it important for employers? 

The definition of “wages” under Section 2(88) is foundational to the SS Code as it forms the basis for calculating provident fund contributions, employee insurance contributions, gratuity, and maternity benefits.  

It is defined to mean “all remuneration, whether by way of salaries, allowances or otherwise, expressed in terms of money or capable of being so expressed which would, if the terms of employment, express or implied, were fulfilled, be payable to a person employed in respect of his employment or of work done in such employment”.  

The expression “wages” is defined to include certain components while inter alia expressly excluding the others, as follows: 

a. Inclusions: 

•  Basic pay 

•  Dearness allowance 

•  Retaining allowance (if applicable) 

b. Exclusions: 

•  Statutory bonus 

•  House rent allowance (HRA) 

•  Employer’s contributions to provident fund and pension 

•  Conveyance / special expenses reimbursement 

•  Overtime wages 

•  Commission 

•  Gratuity 

•  Retrenchment compensation 

•  Residential accommodation and similar perquisites 

Additionally, the definition also incorporates a ‘50% cap rule’, which stipulates that if the aggregate value of the excluded components exceeds 50% of an employee’s total remuneration, the excess amount must be included back to “wages” for the purpose of computing statutory contributions. This is a significant provision that requires employers to carefully review their cost-to-company (“CTC”) packages to ensure that excluded allowances and benefits do not inadvertently reduce the statutory wage bases. 

5. How does the SS Code expand coverage to new categories of workers such as gig workers, platform workers, and unorganised workers? 

The SS Code introduces a framework for social security of workers outside the traditional employer-employee relationship. The relevant definitions of such new category of workers are as follows: 

  1. “Gig worker”: A person who performs work or participates in a work arrangement outside the traditional employer-employee relationship. 
  1. “Platform work”: A work arrangement outside a traditional employer-employee relationship facilitated through an online platform. 
  1. “Platform worker”: A person engaged in or undertaking ‘platform work’. 
  1. “Unorganised worker”: A home-based worker, self-employed worker, or wage worker in the unorganised sector, including workers in the organised sector not covered by the:  
    • Industrial Disputes Act, 1947 (now subsumed under the Industrial Relations Code, 2020); or  
    • Chapters III–VII of the SS Code i.e., workers entitled to provident fund, employees’ compensation and maternity benefit provisions under the Code.  

6. What specific social security rights and benefits do unorganised, gig workers and platform workers have, and who is responsible for their social security, the platform or government? 

The SS Code empowers the Central Government to frame social security schemes for welfare of ‘gig workers’ and ‘platform workers’ covering: 

•  Life and disability cover;  

•  Accident insurance; 

•  Health and maternity benefits;  

•  Old age protection;  

•  Crèche facilities; and  

•  Any other benefit as determined by the Central Government. 

Additionally, the SS Code requires that such workers are formally registered to avail the benefits provided under these schemes. 

The SS Code requires the ‘aggregators’ to contribute between 1% and 2% of their annual turnover (as notified by the Central Government), to the social security fund framed by the Central Government. This contribution to be paid by aggregators is capped at 5% of the total amount paid or payable by the aggregator to the unorganised, gig workers and platform workers.   

The term ‘aggregator’, under the SS Code, has been defined as “digital intermediary or a marketplace for a buyer or user of a service to connect with the seller or the service provider”. Furthermore, Schedule 7 of the SS Code, also classifies aggregators into various categories such as, ride sharing services, food and grocery delivery services, e-Market place, etc. 

The provisions related to inter alia registration, gig and platform workers, and procedure for implementation of schemes for contribution have been specified under Chapter VIII of the SS Rules.  

Further, the SS Rules provide that for a gig and platform worker to be eligible for benefits under the SS Code, they are required to have been engaged with an aggregator for not less than 90 (ninety) days in the previous financial year, or in the case of multiple aggregators, for not less than 120 (one hundred and twenty) days cumulatively across aggregators. A gig or platform worker shall cease to be eligible for benefits once they attain the age of 60 (sixty) years, or if not engaged with any aggregator for the requisite period in the last financial year.  

However, it is significant to note that the specific scheme details and contribution rates, have not yet been prescribed and will depend on schemes framed and notified by the Central Government, from time to time.  

7. What specific obligations are imposed on aggregators under the SS Rules in relation to the registration and social security contributions for gig and platform workers?  

In addition to the contribution obligations of aggregators set out in the SS Code (as described in Q 6 above), the SS Rules (Rule 48) impose the following specific procedural obligations on aggregators: 

  1. Registration of Workers: Every unorganised worker, gig and platform worker who has completed 16 (sixteen) years of age is required to get registered, as per the manner prescribed under Rule 48 of the SS Rules. Further, every aggregator is required, within 45 (forty-five) days from the commencement of the SS Rules (i.e., 8 May 2026), to share the details of all existing gig and platform workers engaged with it, in real time or daily basis through Application Programming Interface (API) or other electronic modes, on the designated portal of the Central Government. Every new gig and platform worker engaged by an aggregator is also required to be registered by the aggregator on the designated portal of the Central Government.  
  1. Aggregator contributions: After finalisation of the audited statement of the account for the previous financial year as per the applicable laws, each aggregator shall submit a final return in Form-XXI, detailing the provisional payment of contribution made along with the details of outstanding contribution, if any, paid by 31st October, of the current year in which the contribution is payable. In the event of delay in payment of contribution, the aggregator is liable to pay interest at the rate of 1% (one percent) per month on the outstanding amount, from the date on which such payment was due till such amount is actually paid. 

8. What social security benefits are available to employees under the SS Code? 

The SS Code provides for the following categories of benefits to employees: 

  1. Employees’ Provident Fund (EPF) benefits: Provident Fund, Employees’ Pension Scheme (EPS), and Employees’ Deposit-Linked Insurance (EDLI). 
  1. Employee State Insurance (ESI) benefits: Sickness benefit, maternity benefit, disablement benefit, dependants’ benefit, medical benefit (including for retired insured persons), and funeral expenses (capped at INR 20,000 as per SS Rules). Similar to erstwhile laws, under the SS Rules, the employers contribution is fixed at 3.25% of wages and employee’s contribution is fixed at 0.75% of wages.  
  1. Gratuity: Lump sum payment on cessation of employment, after qualifying the threshold for continuous period of service. 
  1. Maternity Benefit: Paid maternity leave, crèche facilities for the use of children under the age of 6 (six) years (applicable to all establishments where fifty or more workers are employed), nursing breaks and related entitlements provided directly by the employer. 
  1. Employees’ Compensation: Compensation for employment injuries and occupational diseases.  
  1. Building and Construction Workers: Welfare benefits for construction workers. 
  1. Welfare schemes for unorganised, gig, and platform workers as framed by the Central Government from time to time. 

9. What is the transition period for the existing pension schemes under the SS Code?  

As per Section 164 (2) (b) of the SS Code, the Employees’ Pension Scheme, 1995 framed under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, will continue to be in force for a period of 1 (one) year, i.e., up to 21 November 2026, so far the provisions thereunder are not inconsistent with the SS Code. 

10. How is the term fixed term employment been defined under the SS Code? 

Fixed term employment was not formally defined under India’s earlier labour law regime. However, they have now been explicitly recognized and given statutory definition under the SS Code, and have been defined to mean:  

“fixed term employment” means the engagement of an employee on the basis of a written contract of employment for a fixed period:  

Provided that— (a) his hours of work, wages, allowances and other benefits shall not be less than that of a permanent employee doing the same work or work of a similar nature; and 

(b) he shall be eligible for all benefits, under any law for the time being in force, available to a permanent employee proportionately according to the period of service rendered by him even if his period of employment does not extend to the required qualifying period of employment.”  

11. How is Gratuity determined for fixed term employees under the SS Code? 

Section 53 of the SS Code expressly provides that gratuity becomes payable to a fixed-term employees upon the expiry of the fixed-term employment contract. Crucially, the requirement of 5 (five) years of continuous service, is waived for fixed-term employees, for whom gratuity is payable pro-rata, after completing just 1 (one) year of continuous service.  

For the purposes of calculating gratuity payable to a fixed term employee, the SS Rules has clarified that an employee who is on a fixed term employment and has rendered service under the said his contract for a period of at least one year, and for subsequent period he/she has rendered services in excess of six months, but less than one year, the said additional period shall be rounded off to one additional year. Accordingly, the fixed term employee shall be paid gratuity for 2 (two) years.  

Further, Gratuity for fixed-term employees is calculated on a pro rata basis i.e., (Monthly wages ÷ 26) × 15 × completed years of service (or pro rata fraction).  

This provision significantly increases the gratuity burden for employers who use fixed-term contracts for project-based or seasonal work and therefore requires appropriate financial provisioning. 

12. Is it mandatory for employers to obtain insurance for gratuity liability under the SS Code? 

Section 57 of the SS Code requires every employer, other than an employer whose establishment belongs to or is under the control of the Central Government or a State Government, to obtain from an insurer regulated by the Insurance Regulatory and Development Authority (IRDAI), an insurance policy covering the employer’s liability for payment towards gratuity.   

Further, the SS Code, empowers the Government to exempt the following employers, from the provision of mandatory insurance:  

  1. An employer who has already established an “approved gratuity fund” (within the meaning of Section 2(5) of the erstwhile Income Tax Act, 1961 (i.e., Section 2(9) of the Income Tax Act, 2025) in respect of its employees and who desires to continue such arrangement; or  
  1.  An employer employing 500 (five hundred) or more persons who establishes a new approved gratuity fund.  

The SS Code also requires every employer, who has taken an insurance or has established an approved gratuity fund, to register his establishment with the competent authority.  

Consequences of non-compliance: 

Under Section 57(5) of the SS Code, if an employer fails to pay the insurance premium or to make contributions to an “approved gratuity fund”, it becomes immediately liable to pay the full gratuity amount (along with interest for delayed payment) directly to the competent authority.  

13. How are provident, pension and insurance fund contributions calculated under the SS Code? 

The SS Code, provides for provident, pension and insurance fund contributions as follows: 

  1. Employee contribution: 10% of wages (standard rate) or 12% (for establishments specified by the Central Government). 
  1. Employer contribution: Equal to employees’ contribution at 10% or 12% (as applicable). However, the employees’ contribution may if he / she so desires, exceed 10% of the wages, subject to the condition that the employer shall not be under an obligation to pay any contribution over and above the contribution payable by him.   
  1. Out of the employer’s contribution stated above, up to 8.33% is directed towards the Employees’ Pension Fund.  
  1. Up to 1% of wages, or such percentage of wages as may be notified by the Central Government, is directed towards the Employees’ Deposit-Linked Insurance Fund. 

14. What are the thresholds for applicability of EPF and ESI provisions under the SS Code? 

a. EPF Provisions 

Under the SS Code, provisions in relation to EPF applies to: (i) every establishment in which 20 (twenty) or more persons are employed; and (ii) any other establishment or class of establishment that the Central Government may by notification specify. Once an establishment falls within the threshold, it continues to be covered even if the number of employees subsequently falls below 20 (twenty). However, the SS Code does not as of now, provide for any wage threshold, for mandatory contribution of provident fund obligations.  

However, the SS Code, under Section 164(2)(b), provides that the Employees’ Provident Funds Scheme, 1952 shall continue to be in force for a period of 1 (one) year from the date of enforcement of the SS Code, i.e., up to 21 November 2026, by which time it is expected that the Central Government will formulate new schemes on these subjects. Therefore, until 21 November 2026, the thresholds under erstwhile Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, shall continue to apply.  

b. Employee State Insurance:  

Under the SS Code, the provisions in relation to ESI applies to: (i) every establishment in which 10 (ten) or more persons are employed other than a ‘seasonal factory’; and (ii) an establishment, which carries on such hazardous or life threatening occupation as notified by the Central Government, in which even a single employee is employed. 

Further, similar to the EPF provisions, the provisions and the thresholds provided under Employees’ State Insurance Act, 1948 and the Rules, Regulations and Scheme framed thereunder, shall continue to apply until 21 November 2026, so far, the provisions thereunder are not inconsistent with the SS Code. 

15. What changes has the SS Code introduced to maternity benefit obligations for employers? 

The maternity benefit provisions provided under Chapter VI of the SS Code, are the same that were provided under the erstwhile Maternity Benefit Act, 1961. However, the SS Code provides for a medical bonus of INR 3500, in case no pre-natal confinement and post-natal care is provided for by the employer free of charge, instead of INR 1000 as provided under the erstwhile Maternity Benefit Act, 1961.  

16. Can an employee simultaneously receive maternity compensation under ESI provisions and maternity benefit under the SS Code? 

No, as per Section 41(7)(b) of the SS Code, a woman who is entitled to and has claimed maternity benefit under the ESI provisions, is not entitled to receive maternity benefit from her employer, separately, under the maternity benefit provisions of the SS Code, for the same event. 

However, a woman who is entitled to maternity benefit from the employer under Chapter VI (Maternity Benefit) at the time Chapter IV (ESI) becomes applicable to her establishment, will continue to receive maternity benefit under Chapter VI until she becomes qualified to claim maternity benefit under Chapter IV.  

Additionally, Section 41(4) provides that an ‘Insured Person’ cannot receive both sickness benefit and maternity benefit for the same period. 

17. What are the primary compliance obligations for employers under the SS Code? 

Employers are subject to the following key obligations under the SS Code: 

  1. Registration of Establishments: Every employer must register their establishment with the appropriate Social Security Organisation in the prescribed manner. The SS Rules provide that such registration is required to be done on the Shram Suvidha Portal using Form I provided under the Occupational Safety, Health and Working Conditions (Central) Rules, 2026. The certificate of registration shall be issued in Form III of the Occupational Safety, Health and Working Conditions (Central) Rules, 2026, electronically, within 7 (seven) days of submission of a complete application.  
  1. EPF and ESI contributions: Employers are required to ensure timely deposit of EPF and ESI contributions in the manner and within the timelines prescribed under the respective regulations. The employer is obligated to pay both the employer’s and employee’s contributions, deducting the employee’s share from wages. 
  1. Gratuity payments: The employer shall pay the amount of gratuity within 30 (thirty) days from the date it becomes payable. Further, the employer shall obtain insurance policy or establish an approved gratuity fund (as discussed in Q10 above). 
  1. Maternity benefit obligations: The employer shall provide paid maternity leave, crèche facilities, nursing breaks, and medical bonus, as applicable. 
  1. Employees’ Compensation: The employer must pay compensation if an employee suffers injury or death due to an accident arising out of and in the course of his employment.  
  1. Social Security for Unorganized, Gig and Platform Workers: Apart from the specific obligation mentioned under Q 7 above, the ‘aggregators’ are required to contribute between 1% and 2% of their annual turnover, subject to a cap of 5% of the total amount paid or payable to gig and platform workers, to the Social Security Fund constituted by the Central Government as dealt with at Q6 above.  
  1. Records, Registers, Returns, etc.: The employers, under the SS Rules, are required to maintain muster rolls, wage registers, attendance records, details of statutory deductions (EPF / ESI, etc.), cess payments, occupational details, and total employee headcount (including contractual and fixed term). Further, they are also required to display statutory notices at the workplace, issue wage slips (electronically or otherwise) and file periodic returns with the relevant authorities. 
  1. Reporting employment vacancies to career centres: Every private sector establishment shall within 90 (ninety) days from the date of notification of the SS Rules, report employment vacancy to the concerned career centre (regional). However, such requirement is not applicable to vacancies which carry a total remuneration of less than INR 11,000 (Indian Rupees Eleven Thousand) per month. 

18. What penalties apply for non- compliance of SS Code by employers? Is there any provision for compounding of offences?  

The SS Code, under Section 133, provides for penalties for various non-compliance by employers, as follows:  

  1. Failure to pay contributions under the SS Code, Rules / Regulations / Schemes: Imprisonment up to 3 (three) years, with a mandatory minimum of 1 (one) year if the employer has deducted the employee’s contribution but failed to remit it and fine of up to INR 1 (one) lakhs. In other cases, minimum 2 (two) months of imprisonment (extendable to 6 (six) months) and fine up to INR 50,000. 
  1. Failure to pay gratuity: Imprisonment up to 1 (one) year or fine up to INR 50,000, or both. 
  1. Failure to provide maternity benefit, failure to pay compensation, obstruction of Inspector-cum-Facilitator: Imprisonment up to 6 (six) months or fine up to INR 50,000, or both. 
  1. Other contraventions as provided under Section 133: Fine up to INR 50,000. 

Further, in case of any second or subsequent conviction for any offence under Section 133 of SS Code, the employer shall be subject to imprisonment of up to 2 (two) years and fine up to INR 2 (two) lakhs. However, if such offence involves failure to pay contributions, cess, maternity benefits, gratuity, or compensation, then the employer shall be subject to imprisonment between 2 (two) to 3 (three) years and fine up to INR 3 (three) lakhs. 

The SS Code also provides for compounding of offences for first-time offences that are punishable with fine only, or with imprisonment not exceeding 1 (one) year and with fine. Such offences may be compounded by a designated officer on payment of a prescribed amount i.e., up to half the maximum fine for fine-only offences, and up to three-fourth for other offences.  

19. What is the procedure and timeline for registration of an establishment under the SS Code, and should existing registered establishments re-register? 

Section 3 of the SS Code requires every employer who falls within the ambit of the SS Code to apply for registration of their establishment in the prescribed manner and within the prescribed time. 

Further, Rule 5 of the SS Rules provides that registration is to be done on the Shram Suvidha Portal using Form I of the Occupational Safety, Health and Working Conditions (Central) Rules, 2026, by providing details about the establishment, and uploading documents related to registration of the establishment including proof of identity and address of the employers as specified in the said Form. 

However, any establishment which is already registered under any other Central labour legislation such as the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 or Employees’ State Insurance Act, 1948, etc., for the time being in force, is not required to obtain registration again under SS Code and such establishment shall be deemed to be registered for the purposes of the SS Code. 

Employers should, however, monitor official notifications for any specific re-registration requirements, for compliance with the registration process on the single-window Shram Suvidha Portal. 

20. What are the obligations of a principal employer towards contract workers with respect to EPF and ESI contributions, under the SS Code? 

Under the SS Code, the principal employer is responsible for ensuring that EPF and ESI contributions are paid in respect of employees engaged through contractors. Further, the Code provides that the contributions paid by a principal employer may be recovered by it from the contractor, either by deduction from any amount payable by it to the contractor under any contract or as a debt payable by the contractor to the principal employer.   

Therefore, it is imperative that employers engaging contract workers put in place robust contractual and audit mechanisms to ensure compliance with regards to contributions payable for such workers.  

Disclaimer: The information contained in this document is not legal advice or legal opinion. The contents recorded in the said document are for informational purposes only and should not be used for commercial purposes. Acuity Law disclaims all liability to any person for any loss or damages caused by errors or omissions, whether arising from negligence, accident or any other cause.

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