Ease of labour regulations and uniformity in labour laws has been an area of focus for the government. The objective is to consolidate and simplify the multitude of labour regulations into four labour Codes – the Code on Wages, Social Security, Industrial Relations and Occupational Safety and Health, subsuming 29 existing regulations.
The Code on Social Security 2020 (Code), which received the Presidential Assent on 28 September 2020, subsumes nine regulations relating to social security, retirement and employee benefits. The effective date of implementation and the issue of relevant schemes is awaited.
This Code is totally different from being a mere consolidation of previous legislations. It has enhanced the coverage, extended the benefit to all workers in the organised / Unorganised sectors, introduced concepts of providing maximum benefits under minimum governance and reflects uniformity in approach across the four Labour codes.
· Enhanced coverage
The Code has widened coverage by including the unorganised sector, fixed term employees and gig workers, platform workers, inter-state migrant workers etc., in addition to contract employees. It is, therefore, important for
establishments to assess the implications and revisit the compliance requirements under the Code.
· Uniform definitions
Uniformity in determining wages for the purpose of social security benefits is another highlight. Given the ambiguity in the current regulations, especially in respect of Provident Fund where clarity was received only after the Supreme Court. This has provided a wide definition for wage.
· Consultative approach
The Code has brought in a facilitating approach by the authorities. Unlike the existing role of inspectors, the Code provides for an enhanced role of inspector-cum-
facilitator whereby employers can look for support and advice to enhance compliances.
· Career Centre
To enable that demand for human resources is met and to monitor employment information, career centres will be established. Employers have to report vacancies to career centres before filling up the same.
Digitisation is the new buzzword and covers almost all sectors; the Code is not an exception. As per the Act, all records and returns have to be maintained electronically. Digitisation of data will help in exchange of information among various stakeholders / funds set up by the Government, will ensure compliance and also facilitate governance.
· Stringent penalties
The strength of implementing a legislation lies in the ease of compliances as well as in the penalties. The Code captures it all. Any failure to deposit employees’ contributions not only attracts a penalty of Rs 100,000, but also imprisonment of one to three years, which can be increased in case of continuous default.