69, Understanding the Code of Social Security through key highlights

How the Code on Social Security Is Structured

The Code on Social Security does not apply uniformly to all organisations. Instead, each benefit or protection under the code applies only when an organisation meets the specific eligibility conditions for that section.

This makes it essential for employers to understand which sections apply to them, rather than assuming that all provisions apply by default.

Maternity Benefit Provisions

Maternity benefits under the code remain largely unchanged from earlier legislation. Organisations with ten or more employees are covered, while factories are covered irrespective of headcount.

Women employees who have completed at least eighty days of service in the previous twelve months are eligible for twenty‑six weeks of fully paid maternity leave. During this period, termination is not permitted.

Organisations employing fifty or more employees are also required to provide crèche facilities. Where pre‑natal and post‑natal medical benefits are not provided, a medical bonus must be paid.

Employee State Insurance (ESIC)

Organisations employing ten or more employees, where employees earn below the prescribed wage threshold, are covered under the ESIC framework.

ESIC provides medical coverage, maternity benefits, unemployment benefits, and death benefits. Once employees cross the wage threshold, they move out of ESIC coverage after the contribution cycle ends.

Gratuity Under the New Code

Gratuity continues to be applicable to organisations employing ten or more employees. Eligibility is based on completion of five years of service, calculated from the date of joining and not confirmation.

A significant change is the inclusion of fixed‑term employees. Fixed‑term employees who complete one year of service become eligible for gratuity on a pro‑rata basis.

Organisations covered under gratuity are required to obtain gratuity insurance to secure future liabilities.

Employees’ Compensation

The compensation provisions apply primarily to factories, mines, and hazardous occupations. There is no wage ceiling for applicability.

Employers are liable for compensation in case of injury or death arising out of and in the course of employment, including direct travel between home and workplace.

Provident Fund Coverage

Provident Fund provisions continue largely unchanged. Organisations with twenty or more employees are required to provide PF benefits.

Once an employee becomes a PF member, they remain covered irrespective of future salary increases, unless specific exit conditions are met.

Unorganised, Gig, and Platform Workers

One of the most significant introductions under this code is the recognition of unorganised, gig, and platform workers.

These workers can now be registered to receive social security benefits such as life insurance, maternity benefits, and pensions, even when they are not part of a traditional employer–employee relationship.

Central and State Rules

The Code on Social Security operates through a combination of central rules and state‑specific rules. While the Act applies nationally, the detailed implementation often depends on state notifications.

Where multiple laws apply, organisations are required to extend the more beneficial provision to employees.

Why HR Must Drive Compliance

The complexity of the Code on Social Security makes it essential for HR practitioners to lead its implementation. Legal interpretation alone is insufficient without operational translation into policies and processes.

When implemented correctly, the code significantly strengthens social protection for employees while providing clarity to employers.

Related Podcast Episode

This article is based on the transcript of the original podcast of the same name featured in India HR Guide.
The transcript has been translated into this article with the support of AI and a human‑in‑the‑loop process.