Workers in some sectors, who contribute to the Employees’ Provident Fund (EPF), may see higher take-home salary, if the Social Security Code Bill becomes an Act.

The Bill was introduced in the Lok Sabha on Wednesday. The Bill talks about providing gratuity for workers even with less than five years of work period, and social security scheme for gig workers, besides other provisions. With the new Bill, all the four labour codes — Code on Wages, the Occupational Safety, Health and Working Conditions Code, the Code on Social Security, and the Industrial Relation Code — have been approved by the Cabinet and introduced in Parliament. Once enacted, the four codes will subsume 44 old labour laws.

The Bill on Social Security Code says, “The Central Government, after making such inquiry as it deems fit, may, by notification, specify rates of employees’ contributions and the period for which such rates shall apply for any class of employee.” This means the government will notify sectors where lower rate of contribution to be applicable. Further, it will also inform about the differential rates.

As of now there are two rates of EPF contribution: 12 per cent and 10 per cent. 12 per cent is applicable for all the units where number of employees is more than 20 while in case of lower number of employees the rate will be 10 per cent. In both the cases, matching contribution is made by the employer.

Gratuity payment

The Bill makes a provision for payment of gratuity in case of Fixed Term Employment on pro-rata basis even if the period of fixed term contract is less than five years. As of now, gratuity is paid to workers completing at least five years of continuous job. Also, it does not differentiate between regular employees and those who are on contract.

The Bill prescribes a special welfare scheme for unorganised workers (including audio visual workers, beedi workers, non-coal workers) on matters relating to life and disability cover, health and maternity benefits, old age protection, education, housing, etc. The State Government will formulate and notify, from time to time, suitable welfare schemes for unorganised workers, including schemes relating to provident fund, employment injury benefit, housing, educational schemes for children, skill up gradation of workers, funeral assistance and old age homes.

Unorganised workers

A special purpose vehicle may also be constituted by the Centre for implementing such scheme. Any scheme notified by the State Government may be wholly funded by the State Government, partly funded by the State Government, partly funded through contributions collected from the beneficiaries of the scheme or the employers, funded from any source including corporate social responsibility fund. The Central Government may provide such financial assistance to the State Governments for the purpose of schemes

comment COMMENT NOW