Are gig workers covered under the Social Security Code?

Yes. The code mandates the creation of a Social Security Fund for unorganised workers, gig workers, and platform workers. Aggregators (such as ride-hailing or delivery platforms) must contribute 1% to 2% of their annual turnover to this fund, capped at 5% of the amount paid to such workers.

What happens if an aggregator delays its Social Security Fund contribution?

Delayed contributions to the Social Security Fund by aggregators attract interest at the rate of 12% per annum on the outstanding amount, as notified under the final rules.

Is Aadhaar mandatory to claim benefits under the Social Security Code?

Yes. An employee or unorganised worker must link their Aadhaar number to their registration to receive any benefit — be it PF, maternity benefit, or state insurance (ESI) — under this code.

How many existing laws does the Social Security Code replace?

The Code on Social Security, 2020 consolidates nine existing social security laws, including the Employees' Provident Funds Act 1952, the Payment of Gratuity Act 1972, the Maternity Benefit Act 1961, the Employees' State Insurance Act 1948, and the Unorganised Workers' Social Security Act 2008.

What is the penalty for delayed gratuity payment to an employee?

Under Section 56, an employer who delays gratuity payment beyond the statutory 30-day window must pay simple interest on the due amount for the entire delay period, at a rate currently pegged around 10% per annum, unless the delay is solely attributable to the employee.

Pillar 2 of 4

Code on Social Security, 2020

Q: What is the new rule for Gratuity under the Social Security Code?

For standard employees, the 5-year continuous service rule remains. However, for fixed-term employees, gratuity is now payable on a pro-rata basis after completing just 1 year of service. Working journalists continue to qualify after 3 years.

The Code on Social Security, 2020 extends India's social safety net to gig economy workers for the first time, while restructuring gratuity payouts for modern, fixed-term workforce dynamics — consolidating nine existing social security laws into a single framework.

Acts Subsumed (9 Total)

This code replaces nine existing social security laws, including:

Employees' Provident Funds Act, 1952
Payment of Gratuity Act, 1972
Maternity Benefit Act, 1961
Employees' State Insurance Act, 1948
Unorganised Workers' Social Security Act, 2008

Key HR Compliance Mandates

1. Gratuity for Fixed-Term Employees

The traditional 5-year continuous service requirement remains for standard employees. However, a major shift occurs for fixed-term employees: gratuity is now payable on a pro-rata basis upon completion of just 1 year of service.

➔ Calculate Fixed-Term Gratuity Payouts

2. Inclusion of Gig & Platform Workers

Gig workers and platform workers are legally recognised for the first time. Aggregators are mandated to contribute between 1% to 2% of their annual turnover (capped at 5% of the amount paid to workers) into a dedicated Social Security Fund. Delayed contributions attract 12% per annum interest on the outstanding amount.

3. Universal Aadhaar Seeding

An employee or unorganised worker must link their Aadhaar number to their profile to receive any benefit — be it PF, maternity benefits, or state insurance — under this code.

Official Resources

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