The First Schedule · Social Security Code

First Schedule: Applicability

The First Schedule decides which chapters of the Code apply to which establishments, mostly by headcount. Provident fund applies at 20 or more employees and ESI at 10 or more persons. Gratuity and maternity benefit cover every factory, mine and plantation, plus shops and establishments that had 10 or more employees on any day in the past 12 months. It is the first thing to check when working out what an establishment owes under the Code.

1 section ~1 min read Official text, PDF p. 99

HR and payroll managersShop and small business ownersFactory and plantation ownersConstruction employers

Key points

1The Employees' Provident Fund chapter applies to every establishment with 20 or more employees. §schedule
2The ESI chapter applies to every establishment with 10 or more persons, except seasonal factories, and to even a one-employee establishment in a hazardous or life-threatening occupation notified by the Central Government. §schedule
3ESI contributions under section 29 are payable on and from the date the Corporation starts providing benefits to that establishment's employees, a date the Central Government notifies. §schedule
4Gratuity covers every factory, mine, oilfield, plantation, port and railway company, with no separate headcount in this row, plus any shop or establishment that had 10 or more employees on any day of the preceding 12 months, and any others the appropriate Government notifies. §schedule
5Maternity benefit covers every factory, mine and plantation, including government ones, plus any shop or establishment that had 10 or more employees on any day of the preceding 12 months, and any others the appropriate Government notifies. §schedule
6Employee's compensation applies only to employers and employees outside the ESI chapter, subject to the Second Schedule. §schedule

At a glance

20 or more employeesHeadcount that brings in provident fundSection schedule 10 or more personsHeadcount that brings in ESISection schedule 1 employeeESI headcount in a notified hazardous occupationSection schedule 10 or more employeesHeadcount for gratuity in shops and establishmentsSection schedule 10 or more employeesHeadcount for maternity benefit in shops and establishmentsSection schedule 12 monthsLook-back period for the gratuity and maternity headcountSection schedule

Earlier law:Employees' Provident Funds and Miscellaneous Provisions Act, 1952Employees' State Insurance Act, 1948Payment of Gratuity Act, 1972Maternity Benefit Act, 1961Employee's Compensation Act, 1923Building and Other Construction Workers' Welfare Cess Act, 1996Unorganised Workers' Social Security Act, 2008Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959

THE FIRST SCHEDULE — APPLICABILITY

In plain words

This table lists each main chapter of the Code and the establishments or people it applies to: provident fund at 20 or more employees, ESI at 10 or more persons, gratuity and maternity benefit for factories, mines and plantations plus shops with 10 or more employees in the past 12 months, employee's compensation where ESI does not apply, and separate rows for construction, unorganised, gig and platform workers, and career centres.

[See sections 1(4), (8) and 152 (1)]

Chapter No.	Chapter Heading	Applicability
(1)	(2)	(3)
III	Employees' Provident Fund	Every establishment in which twenty or more employees are employed.
IV	Employees’ State Insurance Corporation	Every establishment in which ten or more persons are employed other than a seasonal factory: Provided that Chapter IV shall also be applicable to 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: Provided further that an employer of a plantation, may opt the application of Chapter IV in respect of the plantation by giving willingness to the corporation, where the benefits available to the employees under that Chapter are better than what the employer is providing to them: Provided also that the contribution from the employers and employees of an establishment shall be payable under section 29 on and from the date on which any benefits under Chapter IV relating to the Employees State Insurance Corporation are provided by the Corporation to the employees of the establishment and such date shall be notified by the Central Government.
V	Gratuity	(a) every factory, mine, oilfield, plantation, port and railway company; and (b) every shop or establishment in which ten or more employees are employed, or were employed, on any day of the preceding twelve months; and such shops or establishments as may be notified by the appropriate Government from time to time.
VI	Maternity Benefit	(a) to every establishment being a factory, mine or plantation including any such establishment belonging to Government; and (b) to every shop or establishment in which ten or more employees are employed, or were employed, on any day of the preceding twelve months; and such other shops or establishments notified by the appropriate Government.
VII	Employee's Compensation	Subject to the provisions of the Second Schedule, it applies to the employers and employees to whom Chapter IV does not apply.
VIII	Social Security and Cess in respect of Building and Other Construction Workers	Every establishment which falls under the building and other construction work.
IX	Social Security for Unorganised Workers'	Unorganised sector, unorganised workers', gig worker, platform worker.
XIII	Employment Information and Monitoring	Career centres, vacancies, persons seeking services of career centres and employers.

Source: The Code on Social Security, 2020, official gazette copy, page 99

In plain words

For employers

For gratuity and maternity benefit, track the highest headcount on any single day in the last 12 months, not the average. Note that the ESI row counts 'persons' employed while the EPF row counts 'employees', so check the Code's definitions when counting heads.

Did you know?

A single employee is enough to bring an establishment under ESI if it carries on a hazardous or life-threatening occupation notified by the Central Government.

Did you know?

For gratuity and maternity benefit, one busy day counts. A shop that had 10 or more employees on any single day of the previous 12 months is covered, even if it usually runs with fewer.

Did you know?

Plantations can choose to come under ESI. The employer opts in by telling the Corporation it is willing, where ESI benefits are better than what the employer already gives.

Did you know?

The gratuity row sets no headcount of its own for factories, mines, oilfields, plantations, ports and railway companies; the 10-employee test is written only for shops and other establishments. Size still matters through the definitions, though: a 'factory' under section 2(32) needs 10 or more employees with power, or 20 or more without.

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.