Issues in the draft rules for the Code on Social Security 2020

Synopsis –  The Government drafted the rules for the Code on Social Security 2020 without considering growing informal workforce.

Introduction:

• During the Budget, Finance Minister highlighted the implementation of the four labour codes.
• Budgetary Allocation for the MSME sector this year was Rs.15700 Crores. This is more than double the amount allotted last year.
• This will be a positive step if it provides jobs and social security to informal workers.

What are the positive aspects of the draft labour codes?

1. Social security benefits will extend to gig and platform workers.
2. Minimum wages will apply to all categories of workers. They all will be covered by the Employees State Insurance Corporation (ESIC).
3. Compliance burden on employers will get reduced. Because the labour codes provide a single registration and licensing instead of multiple ones at present.

Impacts of lockdown on informal workers-

1. The lockdown impacted the informal sector more. This is highlighted by the Oxfam inequality Virus report. Few key findings of the report were,
   • Informal workers were the worst hit– 75% out of the total 122 million who lost their jobs were in the informal sector.
   • Over 300 informal workers died due to the lockdown due to starvation, suicides, exhaustion, road and rail accidents, police brutality and denial of timely medical care.
2. More than 2,582 cases of violation of human rights were recorded by the National Human Rights Commission as early as April 2020.

What are the issues pertaining to the draft rules for the code on Social security, 2020?

1. First, Lack of information- The Draft rules make Aadhaar based registration mandatory for receiving benefits. However, there is not much information available in the registration process.
2. Second, Confusion regarding applicability-There is no specific guidelines is provided on how benefits will be applicable to all the informal sector employee.
   • A question for example- Will migrant workers qualify for the social security benefits if they employed in a different state than the registered [Aadhaar based] state?
3. Third, rising inequality gap- The draft rules not able to address the issues of the growing informal workforce. The growing informal workforce along with the lack of state’s accountability is responsible for rising inequality.
   • Due to this, workers face the risk of human and labour rights violation. It also leads to unsafe and unregulated working conditions and lower wages and other vulnerabilities.

Way forward-

• There is a need to address the growing informal workforce and provide social protection, especially to the 450 million informal sector workers.
• It is important that the draft labour codes take that also into account.