The Code on Social Security, 2019 (“Bill”) has been introduced in the Lok Sabha on 11th December 2019. The Bill seeks to amend and consolidate nine Labour Legislations relating to social security of the employees and the matters connected therewith.
The Bill was previously introduced by the Ministry on 17th September 2019. Now, with the introduction of the Bill in the Lok Sabha, certain alterations have been made in the provisions of the previously introduced Bill.
Key takeaways from the Bill are:
- Previously the Code had proposed to give an option to employees to join the National Pension System. The Bill introduced in the Lok Sabha proposes to do away with the provisions of the National Pension System.
- Under the Provident Fund Scheme, the contribution paid by the employer to the fund is proposed to be 10% of the of the wages for the time being payable to each of the employees and that of the employee will be equal to the contribution of the employer.
In the preliminary draft of the Bill, the contribution of the employer was proposed to be 12% which is now reduced to 10%.
- The Bill proposes to impose a duty on the employer to pay gratuity to the fixed term employee on pro rata basis (proportionately).
Currently, the workers are not entitled to gratuity before completing five years of continuous service, as prescribed in the Payment of Gratuity Act, 1972.
- Further, the Bill proposes that an establishment which is already registered under any other labour law need not be required to obtain registration again under this Code and the previous registration will be deemed to be registration under the provisions of this Code.
It is pertinent to mention here that in the preliminary draft, the Central Government would allot the same registration number on the establishment only then it would have been deemed to be registered. Now, the procedure is proposed to be simplified.
Source: Lok Sabha
