The Code On Social Security, 2020

Posted 23 Dec 2025

Updated 26 Dec 2025

2 min read

Incorporates nine existing social security laws.

Aim: To extend social security to all workers, including unorganized, gig, and platform workers.
Key Provisions
- Gig and Platform Workers and aggregator: Legally defined for the 1st time.
  - Aggregators to contribute 1-2% of annual turnover (max 5% of payments to workers) to the social security fund.
- Expanded ESIC (Employees' State Insurance) Coverage: ESIC now applies pan-India, eliminating the criteria of "notified areas."
  - Establishments with fewer than 10 employees may voluntarily opt in with mutual consent of employers and employees.
  - Coverage would be mandated for hazardous occupation and extended to plantation workers.
- Uniform Definition of Wages: "Wages" now include basic pay, dearness allowance, and retaining allowance.
  - 50% of the total remuneration (or such percentage as may be notified) shall be added back to compute wages, ensuring consistency in calculating gratuity, pension, and social security benefits.
- Gratuity for Fixed-Term Employees: Fixed-term employees become eligible for gratuity after one year of continuous service (earlier five years).

Merits	Demerits
National Database for Unorganized Workers: Provides for creating a national digital platform (NDUW) with registration and skill details of unorganized workers. Expanded social security: As both organised and unorganised workers are covered	Lack of clarity on funding mechanisms of social security fund Lack of Universal social security: The coverage of schemes remains dependent on establishment size thresholds. For ESIC- Establishments with fewer than 10 employees may voluntarily opt in