Labour Law Expertsby Chheda Consultants

Chapter IX · Social Security Code

Social Security for Unorganised Workers, Gig Workers and Platform Workers

This chapter requires the Central and State Governments to frame welfare schemes for unorganised workers, and lets the Central Government frame schemes for gig and platform workers. A worker aged 16 or above (or such age as the Centre prescribes) registers by self-declaration and an application that includes the Aadhaar number, and a registered worker is eligible for these benefits. Aggregators in the categories listed in the Seventh Schedule can be made to contribute at a rate the Centre notifies, between 1% and 2% of annual turnover, capped at 5% of what they pay or owe these workers.

6 sections ~7 min read Official text, PDF pp. 67–69
Aggregators and platform businessesHR managersGig and platform workersUnorganised sector workers

Key points

  1. 1The Central Government frames schemes for unorganised workers on life and disability cover, health and maternity, old age and education; State Governments frame schemes on provident fund, employment injury, housing, children's education, skills, funeral assistance and old age homes. §109
  2. 2Every unorganised, gig or platform worker must register for this Chapter, which needs an age of 16 or above (or the age the Centre prescribes), a self-declaration and an application with documents including the Aadhaar number; a registered worker is eligible for the scheme's benefits. §113
  3. 3The Central Government may frame schemes for gig and platform workers covering life and disability cover, accident insurance, health and maternity, old age protection and crèche, and each scheme can set out the role of aggregators. §114
  4. 4Aggregators in Seventh Schedule categories can be made to contribute at a rate the Central Government notifies, between 1% and 2% of annual turnover, from a date it notifies, capped at 5% of what they pay or owe gig and platform workers; the money goes towards the social security fund under section 141. §114
  5. 5Schemes can be funded by the Centre, the States, contributions from beneficiaries, employers or aggregators, corporate social responsibility (CSR) funds under the Companies Act, 2013, or other sources the scheme names. §109§110§114
  6. 6Governments may run toll-free helplines and facilitation centres to tell workers about schemes and help them register and enrol. §112

At a glance

16 yearsMinimum age to register (unless the Centre prescribes another age)Section 1131% to 2%Band for the aggregator contribution rate (the exact rate is notified by the Centre), as a share of annual turnoverSection 1145%Cap on aggregator contribution, as a share of amounts paid or payable to gig and platform workersSection 1145Aggregator representatives on the Board for gig and platform workersSection 1145Gig and platform worker representatives on that BoardSection 1145State Government representatives on that Board, by rotationSection 114
Earlier law:Unorganised Workers' Social Security Act, 2008
109

Framing of schemes for unorganised workers

In plain words

The Central Government must frame welfare schemes for unorganised workers on life and disability cover, health and maternity, old age, education and any other benefit it decides, and State Governments must frame schemes including provident fund, employment injury, housing, children's education, skills, funeral assistance and old age homes. A Central scheme may be funded by the Centre, the States, beneficiaries, employers, CSR funds or other sources, must set out its scope, beneficiaries, resources, implementing agency and grievance redressal, and may be run through a special purpose vehicle.

(1)

The Central Government shall frame and notify, from time to time, suitable welfare schemes for unorganised workers on matters relating to—

(i)

life and disability cover;

(ii)

health and maternity benefits;

(iii)

old age protection;

(iv)

education; and

(v)

any other benefit as may be determined by the Central Government.

(2)

The State Government shall frame and notify, from time to time, suitable welfare schemes for unorganised workers, including schemes relating to—

(i)

provident fund;

(ii)

employment injury benefit;

(iii)

housing;

(iv)

educational schemes for children;

(v)

skill upgradation of workers;

(vi)

funeral assistance; and

(vii)

old age homes.

(3)

Any scheme notified by the Central Government under sub-section (1), may be—

(i)

wholly funded by the Central Government; or

(ii)

partly funded by the Central Government and partly funded by the State Government; or

(iii)

partly funded by the Central Government, partly funded by the State Government and partly funded through contributions collected from the beneficiaries of the scheme or the employers as may be specified in the scheme by the Central Government; or

(iv)

funded from any source including corporate social responsibility fund within the meaning of the Companies Act, 2013 or any other such source as may be specified in the scheme.

(4)

Every scheme notified by the Central Government under sub-section (1) shall provide for such matters that are necessary for the efficient implementation of the scheme including the matters relating to all or any of the following, namely:—

(i)

scope of the scheme;

(ii)

authority to implement the scheme;

(iii)

beneficiaries of the scheme;

(iv)

resources of the scheme;

(v)

agency or agencies that will implement the scheme;

(vi)

redressal of grievances; and

(vii)

any other relevant matter,

and a special purpose vehicle may also be constituted by the Central Government for the purpose of implementation of any such scheme.

Source: The Code on Social Security, 2020, official gazette copy, page 67
110

Funding of State Government schemes

In plain words

A State scheme may be funded by the State alone, partly by contributions from beneficiaries or employers as the scheme specifies, or by CSR funds and other sources, and the State may ask the Centre for financial help.

(1)

Any scheme notified by the State Government under sub-section (2) of section 109 may be—

(a)

wholly funded by the State Government; or

(b)

partly funded by the State Government, partly funded through contributions collected from the beneficiaries of the scheme or the employers as may be specified in the scheme by the State Government; or

(c)

funded from any source including corporate social responsibility fund referred to in clause (iv) of sub-section (3) of section 109 or any other such source as may be specified in the scheme.

(2)

The State Government may seek financial assistance from the Central Government for the schemes framed by it.

(3)

The Central Government may provide such financial assistance to the State Governments for the purpose of schemes for such period and on such terms and conditions as it may deem fit.

Source: The Code on Social Security, 2020, official gazette copy, page 68
111

Record keeping

In plain words

Every scheme must say how its records are kept, electronically or otherwise, and who keeps them, with continuous numbering where possible to avoid duplicate entries.

The Government formulating and notifying the scheme under this Chapter shall provide therein the form and manner of keeping the records electronically or otherwise relating to the scheme and the authority by whom such records shall be maintained:

Proviso

Provided that such records shall, as far as may be possible, bear continuous number for the purpose of proper management of the scheme and for avoiding any duplication and overlapping in records.

Source: The Code on Social Security, 2020, official gazette copy, page 68
112

Helpline, facilitation centre, etc., for unorganised workers, gig workers and platform workers

In plain words

The appropriate Government may set up toll-free helplines or facilitation centres to share information on schemes and help unorganised, gig and platform workers apply, register and enrol.

The appropriate Government may set up a toll free call centre or helpline or such facilitation centres as may be considered necessary from time to time to perform any or more of the following functions, namely:—

(a)

to disseminate information on available social security schemes for the unorganised workers, gig workers and platform workers;

(b)

to facilitate filing, processing and forwarding of application forms for registration of unorganised workers, gig workers and platform workers;

(c)

to assist unorganised workers, gig workers and platform workers to obtain registration; and

(d)

to facilitate the enrolment of the registered unorganised workers, gig workers and platform workers in the social security schemes.

Source: The Code on Social Security, 2020, official gazette copy, page 69
113

Registration of unorganised workers, gig workers and platform workers

In plain words

Every unorganised, gig or platform worker aged 16 or above (or the age the Centre prescribes) must register through a self-declaration and an application with documents including the Aadhaar number, gets a distinguishable number for the application, and is eligible for the scheme's benefits once registered. The Central or State Government contributes to a scheme as that scheme specifies.

(1)

Every unorganised worker, gig worker or platform worker shall be required to be registered for the purposes of this Chapter, subject to the fulfilment of the following conditions, namely:—

(a)

he has completed sixteen years of age or such age as may be prescribed by the Central Government;

(b)

he has submitted a self-declaration electronically or otherwise in such form and in such manner containing such information as may be prescribed by the Central Government.

(2)

Every eligible unorganised worker, gig worker or platform worker referred to in sub-section (1) shall make an application for registration in such form along with such documents including Aadhaar number as may be prescribed by the Central Government and such worker shall be assigned a distinguishable number to his application:

Proviso

Provided that the system of electronic registration maintained by the appropriate Government shall also provide for self registration by any such worker in such manner as may be prescribed by the Central Government.

(3)

A registered unorganised worker, gig worker or platform worker shall be eligible to avail the benefit of the concerned scheme framed under this Chapter.

(4)

The Central Government, or as the case may be, the State Government shall make such contribution in a scheme as may be specified therein.

Explanation

Explanation.—For the purposes of this section, the term "Aadhaar" shall have the same meaning as is assigned to it in section 142.

Source: The Code on Social Security, 2020, official gazette copy, page 69
114

Schemes for gig workers and platform workers

In plain words

The Central Government may frame social security schemes for gig and platform workers, funded by the Centre, the States, aggregators, beneficiaries, CSR funds or any other source. Aggregators in Seventh Schedule categories contribute towards the social security fund under section 141 at a rate the Centre notifies between 1% and 2% of annual turnover (capped at 5% of amounts paid or payable to these workers), and the National Social Security Board, with a changed membership, acts as the welfare board for these workers.

(1)

The Central Government may frame and notify, from time to time, suitable social security schemes for gig workers and platform workers on matters relating to—

(a)

life and disability cover;

(b)

accident insurance;

(c)

health and maternity benefits;

(d)

old age protection;

(e)

crèche; and

(f)

any other benefit as may be determined by the Central Government.

(2)

Every scheme framed and notified under sub-section (1) may provide for—

(a)

the manner of administration of the scheme;

(b)

the agency or agencies for implementing the scheme;

(c)

the role of aggregators in the scheme;

(d)

the sources of funding of the scheme; and

(e)

any other matter as the Central Government may consider necessary for the efficient administration of the scheme.

(3)

Any scheme notified by the Central Government under sub-section (1), may be—

(a)

wholly funded by the Central Government; or

(b)

partly funded by the Central Government and partly funded by the State Government; or

(c)

wholly funded by the contributions of the aggregators; or

(d)

partly funded by the Central Government, partly funded by the State Government and partly funded through contributions collected from the beneficiaries of the scheme or the aggregators, as may be specified in the scheme framed by the Central Government; or

(e)

funded from corporate social responsibility fund within the meaning of Companies Act, 2013; or

(f)

any other source.

(4)

The contribution to be paid by the aggregators for the funding referred to in clause (ii) of sub-section (1) of section 141, shall be at such rate not exceeding two per cent., but not less than one per cent., as may be notified by the Central Government, of the annual turnover of every such aggregator who falls within a category of aggregators, as are specified in the Seventh Schedule:

Proviso

Provided that the contribution by an aggregator shall not exceed five per cent. of the amount paid or payable by an aggregator to gig workers and platform workers.

Explanation

Explanation.—For the purposes of this sub-section, the annual turnover of an aggregator shall not include any tax, levy and cess paid or payable to the Central Government.

(5)

The date of commencement of contribution from aggregator under this section shall be notified by the Central Government.

(6)

The National Social Security Board constituted under sub-section (1) of section 6 shall be the Board for the purposes of the welfare of gig workers and platform workers under the provisions of this Code:

Proviso

Provided that while such Board serves the purposes of welfare of, or matters relating to, gig workers and platform workers, the following members shall constitute the Board instead of the members specified in clauses (c) and (d) of sub-section (2) of section 6, namely:—

(a)

five representatives of the aggregators as the Central Government may nominate;

(b)

five representatives of the gig workers and platform workers as the Central Government may nominate;

(c)

Director General of the Corporation;

(d)

Central Provident Fund Commissioner of the Central Board;

(e)

such expert members as the Central Government may consider appropriate;

(f)

five representatives of the State Governments by such rotation as the Central Government may consider appropriate;

(g)

Joint Secretary to the Government of India in the Ministry of Labour and Employment, who shall be the Member Secretary to the Board.

(7)
(i)

The Central Government may provide that—

(a)

the authority to collect and to expend the proceeds of contribution collected;

(b)

the rate of interest to be paid by an aggregator in case of delayed payment, less payment or non-payment of contribution;

(c)

self-assessment of contribution by aggregators;

(d)

conditions for cessation of a gig worker or a platform worker; and

(e)

any other matter relating to smooth functioning of the social security scheme notified under this section,

shall be such as may be prescribed by that Government.

(ii)

The Central Government may by notification, exempt such aggregator or class of aggregators from paying of contribution under sub-section (4), subject to such conditions as may be specified in the notification.

Explanation

Explanation.—For the purposes of this section, an aggregator having more than one business shall be treated as a separate business entity or aggregator.

Source: The Code on Social Security, 2020, official gazette copy, page 69

Applying this at your workplace?

Ask the people who have done it for 50 years.

Chheda Consultants, Mumbai: PF, ESI, payroll and Labour Code compliance across India.