The Code on Social Security, 2020

The Code on Social Security, 2020 (SS Code) is one of the most significant reforms in India’s labour law framework. By consolidating nine central Acts into one unified Code, it aims to modernise and extend social protection across India’s diverse workforce—formal, informal, gig, platform, and unorganised.

At the heart of understanding which benefits apply to whom lies the combined reading of:

1. Section 1(4) – the master applicability clause

2. The First Schedule – the detailed applicability table for each Chapter

Together, they form the Applicability Framework of the SS Code.

This article presents a complete, expert-level analysis of both Section 1(4) and the First Schedule, with legal interpretation, comparison to earlier Acts, and practical examples.

1.1 Statutory Meaning

Section 1(4) states that the applicability of each Chapter of the SS Code shall be exactly as specified in Column (3) of the First Schedule.

It also clarifies that this is:

“Without prejudice to the applicability of the other provisions of the Code.”

Meaning:

Even if a specific Chapter does not apply to an establishment (e.g., PF or ESI), other general provisions of the Code (e.g., registration, authorities, penalties, definitions) may still apply.

1.2 Legal Interpretation

(i) Each Chapter has its own Applicability Rules

The SS Code is not applied as an “all or nothing” law.

Instead, every Chapter—PF, ESI, Gratuity, Maternity Benefit, etc.—has custom applicability conditions, found only in the First Schedule.

This avoids overlap, conflicts, and confusion.

(ii) “Without Prejudice” – Legal Significance

The phrase ensures that the non-applicability of a particular Chapter does not provide blanket exemption from the entire Code.

Example:

If ESI (Chapter IV) does not apply due to employee count <10:

• Employees’ Compensation (Chapter VII) may apply.

• General provisions (definitions, authorities, offenses) still apply.

(iii) Harmonisation Across Nine Earlier Acts

Before the Code, each law had separate applicability rules.

Section 1(4) harmonises them by pointing to one consolidated Schedule.

This creates a unified, conflict-free compliance structure.

The First Schedule provides the complete applicability conditions for each major Chapter of the Code.

Below is an in-depth Chapter-wise analysis, comparisons with original Acts, and examples.

Earlier Act: Employees’ Provident Funds and Miscellaneous Provisions Act, 1952

Applicability

Comparison with EPF Act, 1952

✔ Same threshold retained

✔ Earlier “specified industries list” (Schedule I) abolished → PF now universal

✔ Voluntary coverage continues under Section 1(5)

Legal Insight

The Code universalises PF applicability, shifting from industry-based coverage to employee-number-based coverage.

Example

A logistics company with 22 employees → PF applies.

A CA firm with 12 employees → PF not mandatory (unless voluntary).

Earlier Act: Employees’ State Insurance Act, 1948

Applicability

Special Conditions:

1. Hazardous Occupations: ESI applies even if 1 employee works in a hazardous occupation (notified by Central Government).

2. Plantations: May voluntarily opt-in.

3. Contribution Start Date: ESI becomes payable only from the date ESIC commences benefits, as notified.

Comparison with ESI Act, 1948

✔ Core threshold of 10 retained

✔ Major changes:

• ESI now pan-India (no separate notified area)

• Hazardous occupation coverage expanded

• Plantation voluntary entry is new

Legal Insight

ESI’s jurisdiction is widened dramatically, strengthening occupational safety and health protections nationwide.

Example

Fireworks factory with 3 workers → ESI applies (hazardous).

IT company with 12 employees → ESI applies.

Earlier Act: Payment of Gratuity Act, 1972

Applicability

• All factories, mines, oilfields, plantations, ports, and railways

• Every shop/establishment with 10+ employees anytime in last 12 months

• Any establishment notified by Government

Comparison with Gratuity Act 1972

✔ Threshold of 10 employees retained

✔ Coverage extended via notifications

✔ Legal recognition of fixed-term employee gratuity introduced in the Code

Legal Insight

The SS Code preserves gratuity obligations while widening scope and simplifying compliance.

Example

A shop had 10 employees for 5 days last year → Gratuity applies permanently.

Earlier Act: Maternity Benefit Act, 1961

Applicability

• All factories, mines, and plantations

• Shops/establishments with 10+ employees anytime in last 12 months

• Government-notified establishments

Comparison with MB Act 1961

✔ Same threshold retained

✔ New modern definitions: commissioning mother, adoptive mother

✔ Digital service delivery introduced

Legal Insight

The Code codifies the progressive benefits introduced in 2017 amendments and strengthens gender protections.

Example

A retail store with 11 employees → Maternity Benefit Chapter applies.

Earlier Act: Employees’ Compensation Act, 1923

Applicability

• Applies to employees not covered by ESI,

• Subject to Second Schedule (hazardous occupations list)

Earlier Act Comparison

✔ Same structure maintained

✔ Clear division created: Either ESI applies OR Employees’ Compensation applies—not both

Legal Insight

Prevents dual liability and streamlines employer responsibility.

Example

A workshop with 6 employees (no ESI) → Employees’ Compensation applies.

Earlier Act: Building and Other Construction Workers Act, 1996

Earlier Cess Act: BOCW Cess Act, 1996

Applicability

Comparison with BOCW Act 1996

✔ Core framework retained

✔ Simplification through unified registration

✔ Flexibility in cess collection authority introduced

Example

Any real estate developer → Covered under BOCW welfare and cess obligations.

Earlier Acts:

• Unorganised Workers Social Security Act, 2008

• First-time legal recognition for gig and platform workers

Applicability

• Unorganised sector

• Unorganised workers

• Gig workers

• Platform workers

Comparison

✔ 2008 framework strengthened

✔ Historic first-ever statutory recognition for gig/platform workers

✔ Aggregator contribution model created

Legal Insight

The Code transforms the future of work social security landscape.

Example

Ola, Uber, Zomato, Swiggy delivery partners → Covered under Chapter IX schemes.

Earlier Act: Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959

Applicability

• Career centres

• Employers

• Job seekers

• Vacancies

Comparison

✔ Act modernised into digital “career centre” framework

✔ Greater transparency introduced

Example

An employer notifying vacancies to a career centre is covered under this Chapter.

This ensures:

✔ Uniform interpretation

✔ Zero conflict between Chapters

✔ Simple compliance roadmap

✔ Modernised social security governance

Case: Engineering Firm

• Employees: 25

• Non-hazardous

• Not a factory

Applicability:

This example shows how Section 1(4) + First Schedule create a complete compliance matrix.

Section 1(4) of the Code on Social Security, 2020 acts as the foundational “gateway” directing all applicability decisions to the First Schedule.

The First Schedule in turn provides clear, chapter-specific thresholds for PF, ESI, Gratuity, Maternity Benefits, Employees’ Compensation, BOCW Welfare, and Unorganised Worker Welfare.

The combined effect:

✔ Harmonises nine major laws

✔ Removes inconsistencies

✔ Enhances compliance predictability

✔ Expands and modernises social security coverage

✔ Supports India’s diverse workforce—formal, informal, gig, platform, and unorganised

This chapter-wise applicability framework is essential reading for HR professionals, compliance officers, labour law practitioners, and policy makers.