Draft Labour Code on Social Security & Welfare – Ministry of Labour & Employment seeks your comments

In line with the recommendations of the 2nd National Commission on Labour, Ministry of Labour & Employment has taken steps for simplification, amalgamation and rationalization of Central Labour Laws and replacing them with 4 Labour Codes:

1. Code on Wages
2. Code on Industrial Relations
3. Code on Social Security & Welfare
4. Code on Occupational Safety, Health & Working Conditions.

Comments were invited in respect of Code on Wages and Code on Industrial Relations and are under consideration of the Government for implementation.

Code on Social Security & Welfare has been formulated by amalgamating all existing Labour Laws related to Social Security (total 15 Labour Laws including EPF Act, ESI Act, Maternity Benefit Act, Payment of Gratuity Act, Employees Compensation Act, Unorganised Social Security Act, and various Welfare Cess /Fund Acts). Comments of all stakeholders have been invited till 16th April 2017, to take an informed decision in this regard.

This merits consideration of all stakeholders – Employers, employees, Officers/Officials affected. Some changes are discussed here, with special emphasis to changes in Provident Fund,  to initiate and stimulate discussions:

SL NO SUBJECT EXISTING PROVISION in EPF ACT/ SCHEME 1952 CHANGES MADE IN PROPOSED LABOUR CODE 1 Extent Extends to the whole of India except J&K. It shall extend to the whole of India. 2. Act Employee Provident Fund and Miscellaneous Provisions Act 1952 A total of 15 Labour Laws amalgated : 1.      Employee Provident Fund and Miscellaneous Provisions Act 1952 2.      Employees State Insurance Act, 1948 3.      Pension Fund Regulatory and Development Authority Act, 2003 4.      Maternity benefit Act, 1961 5.      Payment of Gratuity Act, 1972 6.      Employees Compensation Act, 1923 7.      Unorganised Workers Social Security Act, 2008 8.      Employees liability act 1938 9.      Bidi Workers’ Welfare Fund Act 1977 10.  Cine Workers Welfare Fund Act 1981 11.  Limestone and Dolomite Mines Labour Welfare Fund Act 1972 12.  Mica Mines Labour Welfare Fund Act 1946 13.  Iron Ore Mines, Manganese Ore Mines and Chrome Ore Mines Labour Welfare FundAct, 1976 14.  Building and Other Construction workers’(Regulation of Employment and Conditions of Service) Act, 1996 15.  Welfare funds established by any state government for providing social security and other benefits to such class of workers, such as under The Bombay Labour Welfare Fund Act 1953. 3 Schemes 1.      Employees’ Provident Funds Scheme,1952 : 2.      Employees’ Pension Scheme, 1995 3.      Employees’ Deposit – Linked Insurance Scheme, 1976 1.      Pension Scheme 2.      Sickness Benefit Scheme 3.      Maternity Benefit Scheme 4.      Disablement Benefit Scheme 5.      Invalidity Benefits Scheme 6.      Dependent Benefits Scheme 7.      Medical Benefit Scheme 8.      Group Insurance Benefit Scheme 9.      Unemployment Benefit Scheme 10.  Provident Fund Scheme 11.  International Workers Pension Scheme 4 Application To every factory or establishment where more than 19 persons are employed. The Code shall apply to – (a) workers that are employed by any entity; (b) worker who may also be the owner or the proprietor of an entity or a self-employed unit; (c) international workers; and (d) Indian citizen, working outside the territory of India, who opts to become a member of social security schemes under this Code   5 Structure and Executive Head ·         Central Board of Trustees – CPFC ·         State Board of Trustees(not notified till date) ·         National Social Security Council – Regulator General ·         Central Board – Director General ·         State Board – Commissioner of Social Security 6 Identity of employees Universal Account Number seeded with Aadhar and Bank Account Numbers Unique Aadhar-based portable Social Security account, to be named as Vishwakarma Karmik Suraksha Khata (‘VIKAS’) 7 Contribution Employees and employer at 12% of the monthly wages ·         Employer contributes at 17.5% of monthly wages. ·         Organised sector employee contributes at 12.5% of monthly wages. ·         Unorganised sector employee contributes at 12.5% of monthly wages(minimum wages) if income is above wage ceiling(below wage ceiling). ·         Self employed individuals contribute at 20% of monthly wages(minimum wages) if income is above wage ceiling(below wage ceiling).   8 Administrative Charges 0.85% of contribution 5% of contribution 8. Interest for delayed remittance 12% Simple Interest 12% Simple Interest 9. Contribution deducted but not remitted or partly remitted 12% Simple Interest Damages upto 100% of dues Criminal case under Section 406/409 of IPC 12% Simple Interest plus Interest @ 1.5% per month Damages upto 100% of dues

Only few selected points have been touched. Feel free to suggest additions, deletions, alteration etc to make the discussions more involved. Stakeholders may suggest desired changes so that requirements of the practitioners find a place in the Final Act.

Happy discussions!!! Use the comments box for discussions with me or my readers…