NEW DELHI : The union government Wednesday introduced the Social Security Code Bill 2019 that, among other things, proposes universalization of social security benefits, and reduction of employees’ provident fund (EPF) monthly contribution by workers in select sectors.
The bill seeks to establish a social security fund and tap the corporate social responsibility fund to offer unorganized sector workers medical, pension, death and disability benefits via the employee’s state insurance corporation.
The bill once passed will empower the central government to exempt select establishments from all or any of the provisions of the code and makes Aadhaar mandatory for availing benefits under various social security schemes.
Once the bill is passed, the central government may “formulate and notify, from time to time, suitable welfare schemes for unorganized workers on matter relating to life and disability cover; health and maternity benefits; old age protection; and any other benefit as may be determined by the central government".
Besides, the bill proposes to offer gratuity to fixed term employees after one year of service on a pro-rata basis as against the current practice of five years.
The code that merges nine existing laws is last of the four broad laws the government has tabled in the parliament to rationalize 44 central labour acts.
The social security code bill will offer flexibility to the government lower the EPFO monthly contribution by employees to boost their take home salary. It, however, won’t change the employers’ share of 12% towards monthly EPF contribution.
While the draft social security code had hinted about corporatization of social security organizations like EPFO and ESIC, the bill leaves their autonomy untouched.
The code also proposes a limited period of five for initiating proceedings in respect of assessment and determination of money dues form employers under social security schemes.
The Code on Social Security Bill 2019, once in place, will merge eight existing labour laws, including Employees’ Compensation Act, 1923; Employees‘ State Insurance Act, 1948, Employees‘ Provident Funds and Miscellaneous Provisions Act, 1952; Maternity Benefit Act, 1961; Payment of Gratuity Act, 1972; Cine Workers Welfare Fund Act, 1981; Building and Other Construction Workers Cess Act, 1996 and Unorganized Workers‘ Social Security Act, 2008.