Labour Code on Social Security & Welfare, 2017

In News: Lok Sabha has cleared three labour code Bills viz the Industrial Relations Code Bill, 2020, Code on Social Security Bill, 2020 and Occupational Safety, Health and Working Conditions Code Bill, 2020

Key Features of Labour Code on Social Security & Welfare, 2017

• Consolidation of multiple laws: It will replace nine social security laws, including Maternity Benefit Act, Employees’ Provident Fund Act, Employees’ Pension Scheme, Employees’ Compensation Act, among others.
• Universalizes social security: Social security has been extended to those working in the unorganised sector, such as migrant workers, gig workers and platform workers.
• Covers Agricultural workers: For the first time, provisions of social security will also be extended to agricultural workers also.
• National Social Security Board: It proposes a National Social Security Board which shall recommend to the central government for formulating suitable schemes for different sections of unorganised workers, gig workers and platform workers.
• Social security organisations: The Bill provides for the establishment of several bodies to administer the schemes. These include a Central Board to administer the provident fund schemes and national and state-level Social Security Boards to administer schemes for unorganised workers.
• Social security fund: The Bill proposes setting up a social security fund using corpus available under corporate social responsibility.
• Reducing employee PF contribution: The bill provides for an option for reducing provident fund contribution (currently at 12% of basic salary) to increase workers disposable income.
• Gig Workers: The bill states that the central or state government may notify specific schemes for gig workers, platform workers, and unorganised workers to provide various benefits, such as life and disability cover.
• Exemption: Under the bill the central government is empowered to exempt selected establishments from all or any of the provisions of the code and makes Aadhaar mandatory for availing benefits under various social security schemes

Concerns

• Does not provide for uniform definition on “social security”.
• There is no dedicated central fund. The proposed corpus will be split into numerous small funds creating a multiplicity of authorities and confusion.
• There is no clarity on how the proposed dismantling of the existing and functional structures, such as the Employees’ Provident Fund Organisation (EPFO) with its corpus of ₹10 lakh crore will be handed over to a government.