Unit 3: Social security legislation

Social security protects workers and their families against contingencies such as sickness, maternity, injury, unemployment, old age and death.

• Social insurance: contributory schemes — ESI, EPF, pension.
• Social assistance: non-contributory, funded by the government — old-age pensions, maternity benefits for the poor.

Indian laws: ESI Act 1948, EPF Act 1952, Maternity Benefit Act 1961, Payment of Gratuity Act 1972 and the Employees' Compensation Act 1923, now consolidated in the Code on Social Security, 2020, which also covers gig and platform workers.

• Object: timely payment of wages without unauthorised deductions.
• Wage period: not more than one month; wages paid before the 7th day (fewer than 1,000 workers) or the 10th day (others) after the wage period; on termination, within two working days.
• Authorised deductions: fines, absence from duty, damage or loss, housing and amenities, advances and loans, income tax, PF, court orders; total deductions limited to 50% of wages (75% where co-operative society dues are included).
• Now part of the Code on Wages, 2019, which applies timely-payment rules to all employees.

• Applicability: factories and establishments with 20 or more employees.
• Eligibility: employees earning up to ₹21,000 a month who worked at least 30 days in the year; disqualified for fraud, violence or theft.
• Bonus: minimum 8.33% of wages (or ₹100), maximum 20%; calculated on a wage ceiling of ₹7,000 or the minimum wage, whichever is higher; allocable surplus (60% of available surplus; 67% for certain foreign banking companies) with set-on and set-off over four years.
• Paid within 8 months of the close of the accounting year.

• Object: compensation for injury by accident arising out of and in the course of employment, and for occupational diseases.
• Employer not liable if the injury does not cause disablement beyond three days, or if the worker was drunk, wilfully disobeyed safety rules or removed safety devices (except for death or permanent total disablement).

• Now part of the Code on Social Security, 2020 as employee's compensation.

• Applicability: establishments with 10 or more employees.
• Eligibility: on superannuation, retirement, resignation, death or disablement after 5 years of continuous service (not required for death or disablement; 1 year for fixed-term employees under the Code on Social Security).

• Can be forfeited for termination due to riotous conduct, violence or an offence involving moral turpitude.