Draft Code on Social Security (Central) Rules, 2020 open to public consultation
The Code on Social Security, 2020 was notified by the Government of India (GoI) on 23 September 2020, and the President assented the same on 29 September 2020.
Continuing its endeavour to redefine the existing labour laws, the GoI, on 13 November 2020, has released1 the draft for the Code on Social Security (Central) Rules, 2020 (Draft Rules) for public consultation. The objections and suggestions2 need to be
submitted by 27 December 2020 as per the GoI, Ministry of Labour & Employment website.
The key considerations of the Draft Rules are summarised below.
Key considerations:
● Employers intending to opt out of the voluntary coverage under the Employees Provident Fund (EPF) and Employees’ State Insurance (ESI) chapters are required to electronically apply to the Central Provident Fund Commissioner or the Director General, as the case may be, for exiting from such applicability, provided that the employer and the majority of the employees in the establishment agree in writing to such an exit. A provision for deemed consent has also been provided upon expiry of 60-days post applying for such exit.
● Registrations under the EPF and ESI chapters are to be sought electronically on the Shram Suvidha Portal. However, the GoI is empowered to dispense with such a requirement in exceptional circumstances by a notification.
● Under the EPF and ESI chapters, the establishments that are already registered under the existing regulations are required to update the registration particulars on the Shram Suvidha Portal, within such period as the Central Government may specify by a separate notification.
● Under the EPF and ESI chapters, the registration will automatically expire after 24-months from the date of registration in case of non-compliance against the registration number is made by the employer.
● Gratuity for an employee on fixed-term employment is required to be provided on rendering service under the contract for a period of one year at the rate of the last drawn wages of 15-days for every completed year of service or part thereof in excess of six months.
● Employers need to provide crèche facility in every establishment where 50 or more women employees are ordinarily employed. Further, the said crèche facility should be located within the establishment or at an appropriate distance from the establishment, such that it is easily accessible to women employees, including those who are working from home.
● State Governments and the State Building Workers’ Welfare Board (Board) are responsible for registering all building or other construction workers through Aadhaar. Employers and contractors must ensure that all such workers are registered on the specified portal. Additionally, if a building worker migrates from one State to another, such worker shall be entitled to get benefits from the Board in whose jurisdiction the worker is currently working, and such Board shall be responsible for providing such benefits to the worker.
● Under the chapter relating to Building and other Construction Workers, in case of delayed payment of cess by the employer, the rate of interest has been reduced from 2% to 1%.
● Unorganised workers, gig workers and platform workers are required to be registered with Aadhaar on a self-declaration basis. Aggregator(s) are required to link their database with the unique registration number issued by the Central Government.
● Self-assessment of contribution by aggregators and provisional contribution as assessed are to be made in the designated account of the Social Security Fund.
● The Draft Rules prescribe guidelines for the filing of unified annual return by employers.
The guidelines that address the issues relating to making provisions for the wage ceiling limit under the EPF chapter (existing limit of INR 15000, definition of excluded employees, and any exemptions provided to international workers) may be notified
separately by the Government, going forward.
1 Notification No. G.S.R. 713 (E) dated 13 November 2020
2The objections and suggestions need to addressed to Shri Rahul Bhagat, Director, Ministry of Labour and Employment, Room No. 302, Shram Shakti Bhawan, Rafi Marg, New Delhi-110001 or by e-mail to [email protected].
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