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Code on Social Security, 2019

Topics Covered: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

Code on Social Security, 2019:


The Parliamentary Standing Committee on Labour, in its report on Code on Social Security, 2019, has submitted its report to Lok Sabha Speaker Om Birla.

  • The parliamentary committee, headed by senior BJD MP Bhartruhari Mahtab, had examined the code referred to it by the Lok Sabha last December.

Key recommendations:

  1. The time limit for payment of gratuity to an employee after termination of employment should be reduced from the current five years of continuous service to just one year.
  2. The provision of gratuity should be extended to all kinds of employees, including contract labourers, seasonal workers, piece rate workers, fixed term employees and daily/monthly wage workers.
  3. “Inter-state migrant workers” should be mentioned as a separate category in the Code.
  4. A welfare fund should be created exclusively for them. The fund should be financed proportionately by the sending states, the receiving states, the contractors, the principal employers and the registered migrant workers.
  5. The funds so created should exclusively be used for workers/employees not covered under other welfare funds.
  6. Create a central online portal and database of registered establishments as well as migrant workers, including building and other construction staff.
  7. Registration: It should be made mandatory for all establishments, including agricultural, non-agricultural, contract as well as self-employed workers to register under one body, instead of multiple organisations. This body “should remain responsible for provision of social security for all types of workers in the country”.
  8. An enabling mechanism should be included in the code itself for portability of Building and Construction Workers Welfare Fund among states so money due to beneficiaries can be paid in any state irrespective of where the cess has been collected.


The Code on Social Security, 2019 was introduced in Lok Sabha in December last year but several concerns were raised over some of its key provisions which led to the Bill being sent to the Standing Committee.

The Code replaces nine laws related to social security and is focused to amend and consolidate the laws relating to social security of the employees’ and related issues.

Insta Facts:

  • The Building and Construction Workers Welfare Fund is raised by levying a cess of 1 per cent of the construction cost.
  • It is part of the Building and Other Construction Workers (BOCW) Act, 1996, which regulates employment and working conditions of construction workers and also provides for their safety and welfare measures.


Prelims Link:

  1. About Building and Construction Workers Welfare Fund.
  2. How many laws will be replaced by Code on Social Security, 2019?
  3. Key proposals in the code.
  4. Applicability of the code.
  5. Inspections and appeals under the code.
  6. Parliamentary standing committees- composition, establishment and functions.

Mains Link:

Write a note on the Code on Social Security, 2019.


Sources: the Hindu.