Labour Ministry Releases Draft Rules Under Social Security Code, 2020

The Union Ministry of Labour and Employment notified the draft rules under the Code on Social Security 2020 on 13.11.2020. It contains operating provisions of the Code on Social Security 2020 relating to Employees State Insurance Corporation, Employees Provident Fund, Gratuity, Social Security, Maternity Benefit, and Cess in respect of Building and Other Construction Workers, Gig Workers, Social security for Unorganised Workers and Platform Workers.

The draft rules provide for Aadhaar based registration which includes self-registration on the portal of the Central Government to the unorganised workers, platform workers and gig workers. There is an initiation for the development of this portal by the Ministry of Labour and Employment. The unorganised workers or gig workers or platform workers need to register on the portal with the details for availing any benefit under any of the social security schemes framed under the Social Security Code 2020. 

The draft rules also contain provisions for Aadhaar based registration of Building and Other Construction Workers on the portal of both the Central Government and the State Government or the State Welfare Board. In the case of a building worker migrating from one state to another, he is entitled to obtain benefits in the state where he is currently working, and the Building Workers Welfare Board of that State provides these benefits to such a worker.

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The draft rules contain provisions regarding gratuity to an employee who is on fixed-term employment. There are also provisions regarding the manner and conditions for exiting from EPFO and ESIC coverage by an establishment. It provides for a single electronic registration of an establishment, which includes cancellation of registration in the case of closure of business activities of an establishment.

The draft rules elaborate the provisions relating to the payment of cess and the procedure for self-assessment in respect of building and other construction workers. The employer will calculate the cost of construction according to the rates mentioned by the Central Public Works Department or State Public Works Department for self-assessment. For self-assessment, the employer can also calculate the cost of construction based on returns or documents submitted to the Real Estate Regulatory Authority.

There is a reduction in the rate of interest on delayed payment of cess to 1 per cent every month from 2 per cent. The present existing rules give power to the Assessing Officer for giving direction that no machinery or material can be removed or disturbed from the construction site. There is a withdrawal of such a power for indefinitely stopping of construction work in the draft rules. Further, the Assessing Officer can visit construction sites after obtaining the prior approval from the Secretary of the Building and Other Construction Workers Board, under the draft rules. 

The Ministry of Labour and Employment invited objections and suggestions on the draft rules under the Code on Social Security 2020 from the stakeholders. The stakeholders must submit their objections and recommendations on the draft rules within 45 days from the date of the notification. 

The Ministry of Labour and Employment earlier notified the draft rules under the Industrial Relations Code before the Code of Social Security. There is an expectation of unveiling the draft rules under the Code on Occupational Safety, Health and Working Conditions soon by the Ministry of Labour and Employment. The Centre is aiming to roll out all the four labour codes from 1st April 2021.

For any clarifications/feedback on the topic, please contact the writer at mayashree.acharya@cleartax.in

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