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One of India's four labour codes, consolidating nine central social security laws and extending coverage to gig and platform workers for the first time.
The Code on Social Security, 2020 is one of the four labour codes through which India consolidated its central labour legislation. It merges nine existing central laws on social security — covering provident fund, employees' state insurance, gratuity, maternity benefit, employees' compensation and unorganised workers' welfare — into a single statute. It received the President's assent on 28 September 2020, and the four labour codes were brought into force in 2025. Its most significant innovation is that it defines and covers gig workers, platform workers and aggregators, extending statutory social security to categories of work that had no place in the older legal framework.
Type: LawConsolidates nine central laws, including the Employees' Provident Funds Act 1952, the Employees' State Insurance Act 1948, the Payment of Gratuity Act 1972, the Maternity Benefit Act 1961 and the Employees' Compensation Act 1923
Defines 'gig worker', 'platform worker' and 'aggregator' in statute for the first time
Requires aggregators to contribute between 1% and 2% of their annual turnover towards social security, subject to a ceiling of 5% of the amount payable to gig and platform workers
Provides for a Social Security Fund for unorganised, gig and platform workers
Extends gratuity to fixed-term employees on a pro-rata basis, without the usual five years of continuous service
Replaces the 'employment exchange' with the concept of a 'career centre' offering broader services
Provides for a National Social Security Board and State Boards for unorganised workers
Frequency: A recurring UPSC Mains GS-II and GS-III topic on labour reform, and a standard SSC and Banking General Awareness item.
Traditional labour law is built on the employer-employee relationship: a worker is on the rolls of an establishment, and that establishment carries the obligation to provide provident fund, insurance and gratuity. Gig and platform work does not fit this. A delivery rider or cab driver working through an app is typically treated as an independent partner rather than an employee, so no establishment carried social security obligations towards them — leaving millions of workers outside every existing statute despite working full-time hours. The Code addresses this not by declaring them employees, which would have far-reaching consequences, but by creating a distinct category with its own funding mechanism: the aggregator contributes a share of turnover into a fund, and benefits flow from that fund rather than from an employment relationship.
Rather than forcing a new kind of worker into an old box, the law builds a new box and decides who pays into it.
The overwhelming majority of India's workforce is in the unorganised sector, historically with no provident fund, no insurance and no pension. The Code's importance lies less in its consolidation of existing laws — useful but administrative — than in its attempt to bring uncovered workers inside the perimeter. The gig economy provision matters because that workforce is growing rapidly and is visible: app-based delivery and transport are among the fastest-expanding forms of urban employment. Criticism has focused on implementation rather than intent: the aggregator contribution is defined as a range rather than a fixed obligation, benefits depend on schemes being framed and funded, and registration of workers on the required platforms remains the practical bottleneck. As with most Indian labour law, coverage on paper and coverage in fact are different questions.
28 September 2020
Nine central social security laws
1% to 2% of annual turnover
5% of the amount payable to gig and platform workers
Pro rata, without the five-year continuous service condition
One of four labour codes; assent 28 September 2020; in force from 2025
Consolidates nine central social security laws
First to define gig worker, platform worker and aggregator
Aggregators contribute 1-2% of turnover, capped at 5% of payments to such workers
Fixed-term employees get pro-rata gratuity without five years' service
Employment exchange replaced by 'career centre'
Nine central laws, including the Employees' Provident Funds Act 1952, Employees' State Insurance Act 1948, Payment of Gratuity Act 1972, Maternity Benefit Act 1961 and Employees' Compensation Act 1923.
The Code on Wages, 2019; the Industrial Relations Code, 2020; the Code on Social Security, 2020; and the Occupational Safety, Health and Working Conditions Code, 2020.
Between 1% and 2% of their annual turnover, subject to a ceiling of 5% of the amount payable by the aggregator to gig and platform workers.
Yes. Fixed-term employees are entitled to gratuity on a pro-rata basis, without needing the five years of continuous service that permanent employees traditionally required.
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