The Code on Social Security, 2020

What it does

The Code (Act No. 36 of 2020) takes the separate Acts on social security for workers and states them once. Provident fund, the employees' state insurance scheme, gratuity, maternity benefit and compensation for injury at work were each governed by their own Act, with their own definitions of who was an employee and what counted as wages. The Code uses common definitions and a common architecture of registration, contribution and benefit.

It also does something the older Acts did not. It brings gig workers and platform workers into the scheme of social security, and places a duty on the aggregator that engages them. The details of how an aggregator contributes and reports sit in the rules made under the Code.

The Code is one of four labour codes. The others deal with wages, industrial relations, and occupational safety, health and working conditions. They were brought into force together, and they share a definition of wages that counts at least half of total remuneration as wages.

Who it binds

Employers and establishments within its thresholds, the workers they employ, and the funds and authorities that administer the benefits. It binds aggregators in respect of gig and platform workers, and principal employers in respect of contract labour in the ways the Code provides. A fixed-term employee is covered as an employee for the benefits the Code gives.

Some duties turn on size. Which benefit applies to which establishment depends on the number of persons employed, and the Code leaves part of that detail to the rules. The central rules and the rules of each State are separate instruments, and an establishment with sites in several States may face different procedures for the same obligation.

What moved out of it

The Code absorbs the Acts it replaces, among them the Payment of Gratuity Act, 1972 and the Employees' Compensation Act, 1923. Those Acts are no longer the source of the duty for the matters the Code covers, and an older judgment under them is read as to the Code's provision that replaced it. Which past events remain governed by the older Act is a question for the repeal and savings provision of the Code and not for general assumption.

What has changed, and when

The Code received assent in 2020 and most of it was brought into force, with the other three labour codes, on 21 November 2025 (S.O. 5319(E)). The Central Government notified final rules under all four codes on 8 May 2026. The central rules under this Code are the Social Security (Central) Rules, 2026, notified as G.S.R. 344(E).

What turns on it in practice

The site's note on what the labour codes cost, and who carries it, treats the gratuity change as a balance sheet matter and not an HR matter. Under the 1972 Act, gratuity generally required five years of continuous service. Under section 53 of the Code a fixed-term employee does not need five years of service and is paid gratuity pro rata, and rule 33 of the Social Security (Central) Rules, 2026 sets at least one year of service under the contract, with a further period of more than six months but less than a year rounded up to one additional year. A company that moved to fixed-term contracts to avoid accruing gratuity finds the reason for the structure reversed, and a provision built on a five-year assumption understates the liability. The Code's wage definition may also raise the base on which gratuity is computed, where allowances have been kept high and basic pay low.

Aggregators have a dated duty. The note records that an aggregator must share the details of the gig and platform workers it already engages on the government portal within 45 days of the central rules coming into force. The duty is on the aggregator and not on a principal employer that uses contract labour.

The employment practice area advises on this work: labour code compliance, disciplinary process and industrial relations. The questions that arise most are which establishments cross a threshold without noticing, how a legacy settlement or contract that is more generous than the Code is to be treated, and how the central rules differ from those of a State. There is little judicial guidance yet on how the Code interacts with settlements and contractual terms agreed under the earlier Acts, and the difficult cases are likely to be litigated before they are settled.