Government Rolls Out Code On Social Security, 2020: A Major Reform For Indian Workers
The Code on Social Security, 2020, one of the four Labour Codes made effective from November 21, 2025, is enacted to consolidate and simplify the complex web of labour laws. According to a government release, the Code merges nine existing labour laws into one comprehensive system, making compliance easier and extending benefits to organised, unorganised, gig, and platform workers.
The Code integrates life and disability insurance, health and maternity care, provident fund, and gratuity provisions, aiming to make welfare delivery more efficient and transparent through digital systems. Fixed-term employees will now be entitled to gratuity after one year of continuous service, down from the previous five-year requirement. For the first time, gig and platform workers will also receive social security benefits via schemes funded by the Centre, States, and aggregators, monitored by the newly formed National Social Security Board.
The Code extends Employees’ Provident Fund coverage to all establishments with 20 or more workers, irrespective of industry. It mandates a National Database for Unorganised Workers, providing each worker with a unique Aadhaar-linked ID, enabling access to benefits anywhere in India.
To ensure fairness, the definition of “wages” is standardised across all labour laws. Allowances such as bonuses and house rent will now count toward wage calculations if they exceed 50% of total pay, enhancing benefits like gratuity and pension.
Employees’ State Insurance Corporation (ESIC) coverage is extended nationwide, with voluntary participation for smaller establishments. Commuting accidents are now included as employment-related injuries, ensuring compensation for workers or their families.
The Code offers 26 weeks of paid maternity leave, 12 weeks for adoptive and commissioning mothers, nursing breaks, and mandates crèche facilities for establishments with 50 or more employees. Work-from-home options post-maternity leave can be arranged mutually between employer and employee.
The Code digitises records, reduces compliance burdens, and replaces imprisonment with monetary fines for several offences. A five-year limit on initiating EPF inquiries and the compounding of offences ensures faster dispute resolution.
The Code reflects the Government’s commitment to inclusive growth and social security for all, in line with the vision of a Viksit Bharat by 2047.
(This Article Has Benn Syndicated From ANI. Mildly Edited For Clarity)
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