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Code on Social Security, 2020

The Code on Social Security, 2020 reforms India’s existing social security laws by extending coverage to all employees and workers — organized, unorganized, and everyone in between.

Key Objectives

The Code runs across 14 chapters, 164 sections, and 7 schedules. It consolidates, amends, and simplifies the following nine Acts:

  • Employee’s Compensation Act, 1923 — compensation paid by certain employers to workmen for injury caused by accident.
  • Employees’ State Insurance Act, 1948 — benefits for employees in cases of sickness, maternity, and employment injury.
  • Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 — provident fund, pension fund, and deposit-linked insurance fund for employees in factories and other establishments.
  • Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959 — compulsory notification of vacancies to employment exchanges.
  • Maternity Benefit Act, 1961 — regulation of women’s employment before and after childbirth, and maternity benefits.
  • Payment of Gratuity Act, 1972 — gratuity scheme for employees in factories, mines, oilfields, plantations, ports, railway companies, shops, and other establishments.
  • Cine-Workers Welfare Fund Act, 1981 — financing welfare activities for cine-workers.
  • Building and Other Construction Workers’ Welfare Cess Act, 1996 — cess on construction costs to fund the Building and Other Construction Workers’ Welfare Boards.
  • Unorganised Workers’ Social Security Act, 2008 — social security and welfare for unorganised workers.

Highlights of the Code

  • Removes the inconsistent definitions and authorities scattered across the nine Acts above, bringing everything under one uniform framework.
  • Lets establishments register for ESI voluntarily, even below the usual employee threshold.
  • Broadens the definition of “employee” to cover more workers, and drops the separate term “workers” altogether.
  • Brings gig workers, platform workers, and other unorganised workers under its scope, with Aadhaar-based registration for both organized and unorganized segments.
  • Cuts the multiple, overlapping compliances from the nine Acts down to a minimal set.
  • Sets up separate social security funds for gig workers, platform workers, and the unorganized sector.
  • Allows electronic registration for every establishment.
  • Establishments already registered under other central labour laws don’t need to register again.
  • Lets establishments that are winding down cancel their registration.

Applicability

  • Applies across all of India.
  • The Central Government will notify, in the Official Gazette, when the Code takes effect — either as a single date for the whole Code, or different dates for different provisions.
  • Applies to all establishments, employers, and employees unless a provision expressly exempts them.

Social Security Organizations

The Central Government will set up the following boards to carry out the Code’s functions:

  • Board of Trustees of Employees’ Provident Fund
  • Employees’ State Insurance Corporation
  • National Social Security Board and State Unorganised Workers’ Board
  • State Building Workers’ Welfare Boards

Employees’ Provident Fund (PF)

Provident fund is a mandatory retirement savings scheme funded by employer and employee contributions, covering funds, pension, and insurance schemes, and administered by government authorities.

Applicability

Applies to every establishment employing 20 or more people.

Schemes

A Central PF Commissioner heads the Employees’ Provident Fund. The Central Government can frame or modify schemes covering PF, pensions (for employees, superannuated employees, widows/widowers, children, orphans, and nominees), the Employees’ Deposit Linked Insurance scheme, and social security benefits for self-employed workers or other classes of persons.

PF, Pension, and Deposit-Linked Insurance Funds

  • The employer contributes 10% of each employee’s wages; the employee matches that contribution. An employee may voluntarily contribute more than 10%, but the employer isn’t obligated to match anything above 10%.
  • The Central Government can raise the employer rate from 10% to 12% for certain establishments after inquiry, and can set different contribution rates and periods for specific classes of employees.
  • The employer pays up to 8.3% of wages (or another percentage the Central Government notifies) into the Pension Fund.
  • The employer pays up to one-fourth of their required contribution into the Insurance Fund, covering the Insurance Scheme’s administrative costs (not the cost of benefits themselves).

Exemptions from the Provident Fund Chapter

This chapter does not apply to:

  • Establishments registered under the Co-operative Societies Act, 1912 (or equivalent state law) employing fewer than 50 people and operating without power.
  • Establishments under Central or State Government control where employees already get contributory provident fund or old-age pension benefits under a government scheme.
  • Establishments set up under any other law where employees already get equivalent contributory provident fund or old-age pension benefits.
  • Employees who, before the Code took effect, were already receiving Provident Fund benefits under a Central or State law.

Employees’ State Insurance (ESI)

ESI funds cover benefit payments, medical treatment for insured persons (and their families, where extended), hospitals and dispensaries, and related administrative costs.

Applicability

  • Every establishment employing 10 or more people, except seasonal factories.
  • Chapter IV also applies to hazardous or life-threatening occupations notified by the Central Government, even with a single employee.
  • Plantation employers can opt into Chapter IV if the ESI benefits are better than what they currently offer.
  • Contributions become payable once the Corporation starts providing Chapter IV benefits to an establishment’s employees, from a date the Central Government notifies.

Contribution

  • Contributions include both employer’s and employee’s share, at Central Government–prescribed rates, and are ordinarily due on the last day of each wage period.
  • The employer pays both shares for every employee — whether hired directly or through a contractor.
  • For directly employed workers, the employer can recover the employee’s share only by deducting it from wages, and only for the relevant period, never more than the actual amount due.
  • Employers and contractors cannot deduct or recover the employer’s share from an employee’s wages.
  • An employer who has paid contributions for a contractor’s employees can recover that amount from the contractor — by deduction from payments owed to the contractor, or as a debt.
  • Contractors must maintain an employee register and submit it to the employer before final settlement, and can recover the employee’s share from wages only.

Benefits

Insured persons and their dependants are entitled to:

  • Sickness Benefit
  • Maternity Benefit
  • Disablement Benefit
  • Dependants Benefit
  • Medical Benefit
  • Funeral Expenses

Some rules on overlapping claims:

  • A person cannot claim both sickness and maternity benefit for the same period, nor both sickness and temporary disablement benefit, nor both maternity and temporary disablement benefit — they choose one.
  • If a person dies while entitled to a cash benefit, the amount due up to the day of death goes to their nominee, or, absent one, to their heir or legal representative.
  • Dependant or disablement benefit under ESI rules out a separate Employees’ Compensation claim from the employer.
  • Maternity benefit under ESI rules out a separate maternity claim from the employer under the Maternity Benefit chapter.
  • Anyone who wrongly receives an ESI benefit must repay its value to the ESI Corporation — or, if they’ve died, their legal representative repays it from their estate.

Gratuity

Gratuity is a payment an employer makes to an employee in recognition of service, paid when the employee leaves after at least 5 years with the organisation.

Applicability

  • Every factory, mine, oilfield, plantation, port, and railway company.
  • Every shop or establishment employing 10 or more people (currently or in the preceding 12 months), plus any others notified by the government.

When Gratuity Is Payable

After at least 5 years of continuous service, on:

  • Superannuation
  • Retirement or resignation
  • Death or disablement from accident or disease
  • Termination of a fixed-term contract
  • Any other event the Central Government notifies

Exceptions to the 5-year rule:

  • For working journalists, the qualifying period is 3 years instead of 5.
  • The 5-year requirement doesn’t apply if employment ends due to death, disablement, expiry of a fixed term, or another Central Government–notified event.
  • On an employee’s death, gratuity goes to their nominee, or, absent one, to their heirs. A minor’s share is deposited with the competent authority and invested on their behalf until they turn 18.

Calculating the Amount

  • Standard rate: 15 days’ wages (or a Central Government–notified number of days) for every completed year of service beyond 6 months, based on last-drawn wages.
  • Piece-rated employees: daily wages are averaged over the 3 months before termination, excluding overtime pay.
  • Seasonal establishment employees: 7 days’ wages per season.
  • Fixed-term or deceased employees: gratuity is paid pro rata.
  • There’s a cap on the total gratuity payable, notified by the Central Government.
  • For employees on reduced wages after a disablement, gratuity for the pre-disablement period uses pre-disablement wages, and post-disablement period uses the reduced wages.
  • None of this limits an employee’s right to better gratuity terms under an award, agreement, or contract.

Forfeiture of Gratuity

An employer can:

  • Forfeit gratuity to the extent of damage or loss caused by an employee terminated for wilful misconduct, omission, or negligence that damaged company property.
  • Wholly or partly forfeit gratuity if termination was for riotous or violent conduct, or for an offence involving moral turpitude committed during employment.

Key Definitions for This Chapter

  • “Employee” excludes anyone holding a post under the Central or State Government who is covered by a separate gratuity law or rules.
  • “Disablement” means an incapacity to do the work the employee could do before the accident or disease.
  • For monthly-rated employees, 15 days’ wages = (monthly wage ÷ 26) × 15.

Continuous Service

An employee counts as being in continuous service if their service is uninterrupted — interruptions for sickness, accident, leave, unauthorized absence (not treated as a service break under standing orders), lay-off, strike, or lock-out (through no fault of the employee) don’t break continuity.

An employee not otherwise in continuous service is still deemed continuously employed for a year if they actually worked:

  • At least 190 days (for underground mine work or establishments open fewer than 6 days a week), or
  • At least 240 days (in any other case)

— during the preceding 12 months. For a 6-month period, the equivalent thresholds are 95 days and 120 days respectively.

Days actually worked include days:

  • Laid off under an agreement or applicable standing orders/laws
  • On full-wage earned leave
  • Absent due to temporary disablement from a work-related accident
  • On maternity leave (up to 26 weeks, for women)

Seasonal establishment employees count as continuously employed for a period if they worked at least 75% of the days the establishment operated during that period.

Employers must pay gratuity within 30 days of it becoming due.

Maternity Benefit

Maternity Benefit protects working women during pregnancy through paid leave and related benefits.

  • Employers cannot employ a woman during the 6 weeks immediately following delivery, miscarriage, or medical termination of pregnancy.
  • Employers must ensure pregnant women aren’t given arduous work, long periods of standing, or any work likely to interfere with the pregnancy, harm foetal development, cause miscarriage, or otherwise affect her health — specifically during the month before her expected delivery, and during any part of the 6-week post-delivery period she hasn’t taken as leave.
  • “Arduous work” means work requiring strenuous effort or that is difficult and tiring.

Applicability

  • Every factory, mine, or plantation, including government-owned ones.
  • Every shop or establishment employing 10 or more people (currently or in the preceding 12 months), plus others notified by the government.

Right to Payment

  • Every woman is entitled to maternity benefit at her average daily wage rate for her period of actual absence (before and after delivery).
  • “Average daily wage” is based on wages for days actually worked in the 3 months before she goes on maternity leave, subject to the minimum wage under the Code on Wages, 2019.
  • She must have actually worked for the employer for at least 80 days in the 12 months before her expected delivery date. Days laid off or on paid holidays count toward this.
  • Maximum entitlement: 26 weeks, with no more than 8 weeks before the expected delivery date.
    • For a woman with two or more surviving children, the maximum drops to 12 weeks (6 weeks before delivery).
    • If a woman dies during this period, benefit is payable only up to her death.
    • If she dies during or shortly after delivery, leaving the child behind, the employer remains liable for the full period; if the child also dies during that period, liability ends at the child’s death. (“Child” includes a stillborn child.)
  • A woman who legally adopts a child under 3 months old, or a commissioning mother, gets 12 weeks of maternity benefit from the date the child is handed over.
  • If her work can be done remotely, the employer may let her work from home after her maternity benefit period, on mutually agreed terms.

Notice of Claim

  • A woman must give written notice to her employer, stating who should receive her maternity benefit and confirming she won’t work elsewhere during that period.
  • If pregnant, the notice must specify an absence start date no earlier than 8 weeks before the expected delivery.
  • A woman who didn’t give notice while pregnant can give it after delivery.
  • On receiving notice, the employer must let her go on leave for the covered period.
  • Pre-delivery benefit is paid in advance on proof of pregnancy; post-delivery amounts are paid within 48 hours of proof of delivery.
  • Failing to give notice doesn’t disqualify her from the benefit — an Inspector-cum-Facilitator can order payment regardless.
  • If a woman entitled to maternity benefit dies before receiving it, the employer pays her nominee, or, absent one, her legal representative.

Medical Bonus

A woman entitled to maternity benefit also gets a medical bonus of ₹3,500 (or a Central Government–notified amount) if the employer doesn’t provide free pre-natal and post-natal care.

Miscarriage, Tubectomy, and Illness Leave

  • Miscarriage or medical termination of pregnancy: 6 weeks’ leave with wages at the maternity benefit rate.
  • Tubectomy operation: 2 weeks’ leave with wages at the maternity benefit rate.
  • Illness arising from pregnancy, delivery, premature birth, miscarriage, or medical termination: up to 1 additional month of leave with wages at the maternity benefit rate.

Nursing Breaks and Crèche Facility

  • Women returning to work after delivery get two nursing breaks a day (in addition to normal rest intervals) until the child turns 15 months.
  • Establishments with 50+ employees must provide a crèche within a prescribed distance, alone or shared with other facilities.
  • Employers must allow 4 crèche visits a day, including normal rest breaks.
  • Establishments can use a shared crèche run by government, municipal, private, or NGO providers, or pool resources with other establishments.
  • Employers must inform every woman in writing (and electronically) about her maternity benefits at the time of hiring.

Dismissal During Pregnancy

  • It’s unlawful for an employer to dismiss or discharge a woman because of an absence covered under maternity provisions, or to give notice that would expire during that absence, or to worsen her service conditions.
  • Dismissal during pregnancy doesn’t strip her of maternity benefit or medical bonus she’d otherwise be entitled to.
  • Exception: for gross misconduct (as prescribed), the employer can, in writing, deny her the benefit or bonus.
  • A woman denied these benefits, or dismissed, can appeal to the competent authority within 60 days; that authority’s decision is final.

Forfeiture

A woman who works for pay during a period she’s been granted maternity leave forfeits her maternity benefit for that period.

Employees’ Compensation

Employers must compensate employees who suffer accidents or occupational diseases arising from and during their employment.

  • Where a law requires notice to an authority about a workplace death or serious injury, the responsible person must send a report to the competent authority within 7 days.
  • “Serious bodily injury” means one likely to cause permanent loss or injury to a limb, sight, or hearing; a fracture; or forced absence from work for more than 20 days.

Applicability

Applies (subject to the Second Schedule) to employers and employees not covered by the ESI chapter.

Employer’s Liability

  • Employers are liable for injuries from accidents or occupational diseases (listed in the Third Schedule) arising from and during employment.
  • Exceptions: injuries causing 3 days or less of disablement, and injuries (not resulting in death or permanent total disablement) directly caused by the employee being under the influence of drink or drugs, wilfully disobeying a safety order, or wilfully ignoring safety equipment.
  • An accident or disease still counts as employment-related even if the employee was technically violating a law or instruction at the time, provided the act was still connected to the employer’s business and would otherwise have counted.
  • An employee who contracts an occupational disease specific to their job after at least 6 months of continuous service is deemed to have suffered an employment injury, and the accident is presumed employment-related unless proven otherwise.
  • Commuting accidents count as employment-related if there’s an established connection between the circumstances, timing, and location of the accident and the employment.
  • No compensation is payable unless the injury or disease is directly attributable to a specific employment-related incident.
  • An employee can’t claim compensation under this chapter if they’ve already sued for damages over the same accident in civil court, and vice versa — the two remedies are mutually exclusive.
  • If a plantation-provided house collapses and injures or kills a worker or family member (not due to the occupant’s fault or a natural disaster), the employer is liable to compensate under the Sixth Schedule.
    • “Worker” here excludes medical officers, high-wage-earning staff, managerial/administrative staff, and temporarily employed construction/maintenance workers.

Amount of Compensation

  • Death: 50% of the deceased’s monthly wages × the relevant age-based factor (Sixth Schedule), or a notified amount — whichever is higher.
  • Permanent total disablement: 60% of monthly wages × the relevant factor, or a notified amount — whichever is higher.
  • Permanent partial disablement: a percentage of the total-disablement compensation, based on the Fourth Schedule (for listed injuries) or a medical practitioner’s assessment of earning-capacity loss (for unlisted injuries).
    • Multiple injuries from one accident are aggregated but capped at the full permanent-total-disablement amount.
  • Temporary disablement: a half-monthly payment of 25% of monthly wages.
  • For accidents occurring outside India, compensation is reduced by any amount already awarded under that country’s law.
  • Half-monthly payments start on day 16 (for disablement lasting 28+ days) or after a 3-day waiting period (for shorter disablement), continuing for up to 5 years or the disablement period, whichever is shorter.
  • Any compensation or allowance already paid by the employer during disablement is deducted from later lump-sum or half-monthly payments (medical-treatment payments don’t count as compensation for this purpose).
  • Half-monthly payments can’t exceed half the difference between pre-accident and post-accident wages.
  • Employees are reimbursed for actual medical expenses from work-related injuries.
  • If disablement ends before a payment date, that half-month’s payment is prorated.
  • On death, the employer must additionally deposit at least ₹15,000 (or a State-prescribed amount) with the competent authority for funeral expenses, payable to the eldest surviving dependant or whoever incurred the expense.

Calculating Monthly Wages

  • If employed continuously for 12+ months before the accident: one-twelfth of total wages earned in the last 12 months.
  • If employed for less than a month: the average monthly wage of a comparable employee doing the same or similar work.
  • Otherwise: 30 × (total wages earned in the last continuous service period ÷ number of days in that period).
  • A service period is “continuous” unless interrupted by an absence exceeding 14 days.

Social Security and Cess for Building and Other Construction Workers

  • A cess of 1–2% of construction cost funds welfare for building workers. Construction cost excludes land cost and any Employees’ Compensation already paid.

Applicability

Applies to every establishment doing building or other construction work.

Employer’s Obligations

  • Employers pay the cess as prescribed — including deduction at source for government/public-sector projects, or advance collection through the local authority approving the construction.
  • The local authority deposits collected cess with the Building Workers’ Welfare Board.
  • Late payment attracts interest for the delay period.
  • Employers must pay any remaining cess (after adjusting advance payments) within 60 days of completing construction, based on self-assessed cost, and file a return.
  • Building workers aged 18–60 who’ve worked at least 90 days in the preceding 12 months must be registered as beneficiaries.
  • A registered worker stops being a beneficiary at 60, or after a year without 90 days of work (excluding absences due to a work injury).
  • Workers registered continuously for at least 3 years before turning 60 remain eligible for Central Government–prescribed benefits.

Building Workers’ Welfare Board

Funded by the cess, Central Government grants and loans, and other Central Government–approved sources.

Social Security for Unorganized, Gig, and Platform Workers

Central Government Welfare Schemes cover:

  • Life and disability cover
  • Health and maternity benefits
  • Old age protection
  • Education
  • Any other Central Government–determined benefit

State Government Welfare Schemes cover:

  • Provident fund
  • Employment injury benefit
  • Housing
  • Educational schemes for children
  • Skill upgradation
  • Funeral assistance
  • Old age homes

Registration

  • Eligibility: at least 16 years old, plus a submitted electronic self-declaration.
  • Eligible workers apply with required documents (including Aadhaar), and get a distinguishable application number. Self-registration is also available electronically.
  • Registered workers can access benefits under the relevant scheme.

Employment Information and Monitoring

  • Employers must report vacancies to the designated career centre before filling them, though they’re not required to actually hire through the centre.

Applicability

Covers career centres, vacancies, job seekers, and employers — with these exclusions:

  • Agricultural/horticultural work in the private sector (except plantations)
  • Domestic service
  • Parliament or State Legislature staff
  • Jobs lasting under 90 days
  • Categories notified by the Central Government
  • Non-government establishments with fewer than 20 employees (or a notified threshold)
  • Any other Central Government–notified employment
  • Vacancies filled through promotion, internal absorption of surplus staff, or recruitment agencies like UPSC/SSC/State PSC
  • Jobs paying below a government-notified monthly remuneration

Section 142 — Application of Aadhaar

Aadhaar-based identity verification is required for:

  • Registering as a member or beneficiary
  • Claiming any benefit (cash, kind, sickness, pension, gratuity, maternity, or fund withdrawal)
  • Using career centre services
  • Receiving payment or medical attendance as an insured person or dependant

Foreign employees must obtain and submit an Aadhaar number as soon as they qualify as residents under the Aadhaar Act, 2016.

Inspector-cum-Facilitator

  • Appointed to advise employers and employees on compliance, and to inspect establishments — potentially via a web-based, randomised inspection system.

Maintenance of Records, Registers, and Returns

Employers must maintain records (electronic or otherwise) covering:

  • Days and hours worked by employees
  • Wages paid
  • Leave, leave wages, overtime wages, and attendance
  • Employee ID numbers
  • Accidents, injuries, and compensation paid (ESI and Employees’ Compensation)
  • Statutory EPF/ESI deductions
  • Cess paid for building/construction work
  • Total employee counts (regular, contractual, fixed-term)
  • New hires during a period
  • Employee occupational details
  • Unfilled vacancies

Employers must also:

  • Display prescribed notices at the workplace
  • Issue wage slips (electronic or otherwise)
  • File returns electronically or otherwise

EPF-related record requirements go into the Provident Fund/Pension/Insurance Scheme rather than general rules; ESI record formats go into regulations rather than rules.

Offences and Penalties

  • Failure to pay employee’s deducted contribution: 1–3 years’ imprisonment plus a ₹1 lakh fine.
  • Other contribution failures: 2–6 months’ imprisonment plus a ₹50,000 fine. (Courts may impose a shorter term for recorded, adequate reasons.)
  • Fine up to ₹50,000 for: deducting the employer’s contribution from wages, reducing wages/benefits in violation of the Code, failing to file required returns, failing to pay compensation due, failing to send required Employees’ Compensation statements, other unspecified contraventions, obstructing an executive officer, violating exemption conditions, or failing to pay administrative/inspection charges.
  • Up to 6 months’ imprisonment and/or a ₹50,000 fine for: penalising a woman employee in violation of ESI/Maternity provisions, obstructing an Inspector-cum-Facilitator or similar officer, failing to provide maternity benefit, failing to produce required records on demand, failing to pay the building workers’ cess, or dishonestly filing false returns.
  • Failure to pay gratuity due: up to 1 year’s imprisonment and/or a ₹50,000 fine.
  • Repeat offences: up to 2 years’ imprisonment and a ₹2 lakh fine. If the repeat offence involves unpaid contributions, charges, cess, maternity benefit, gratuity, or compensation, the penalty rises to 2–3 years’ imprisonment and a ₹3 lakh fine.

Draft Rules

The Central Government notified the Draft Code on Social Security (Central) Rules, 2020, effective from final Gazette publication alongside the Code itself. Once effective, these rules will replace:

  • Employees’ State Insurance (Central) Rules, 1950
  • Tribunal (Procedure) Rules, 1997
  • Employees’ Provident Funds Appellate Tribunal (Conditions of Service) Rules, 1997
  • Employment Exchanges (Compulsory Notification of Vacancies) Rules, 1960
  • Maternity Benefit (Mines and Circus) Rules, 1963
  • Payment of Gratuity (Central) Rules, 1972
  • Cine-Workers Welfare Fund Rules, 1984
  • Building and Other Constructions Workers’ Welfare Cess Rules, 1998
  • Unorganised Workers’ Social Security Rules, 2009

Separately, the Draft Code on Social Security (Employees’ Compensation) (Central) Rules, 2021 will replace:

  • Employees’ Compensation Rules, 1924
  • Employees’ Compensation (Transfer of Money) Rules, 1935
  • Employees’ Compensation (Venue of Proceedings) Rules, 1996

FAQs

See: https://www.greythr.com/faqs/social-security-code/

Key Definitions

Aggregator — a digital intermediary or marketplace connecting buyers/users of a service with sellers/providers.

Building or other construction work — construction, alteration, repair, maintenance, or demolition of buildings, roads, railways, dams, pipelines, towers, and similar infrastructure, as further specified by the Central Government. Excludes factory/mine-related construction, work involving fewer than 10 workers in the past 12 months, and individual residential construction under ₹50 lakh (unless it exceeds a notified worker threshold).

Building worker — someone doing skilled, semi-skilled, or unskilled manual, technical, or clerical work connected to building/construction work, excluding managerial, supervisory, or administrative staff.

Career centre — an office (including employment exchanges) providing career services: registration, information on vacancies, job-seeking support, and vocational/self-employment guidance.

Commissioning mother — a biological mother whose egg is used to create an embryo implanted in another woman.

Completed year of service — 12 months of continuous service.

Confinement — labour resulting in a live birth, or labour after 26 weeks of pregnancy resulting in a birth (alive or dead).

Contract labour — a worker hired by or through a contractor for establishment work, including inter-state migrant workers, but excluding regularly employed contractor staff with standard employment terms and benefits.

Contractor — someone who delivers a result for an establishment (not just supplying goods) through contract labour, or who supplies contract labour as manpower; includes sub-contractors.

Delivery — the birth of a child.

Dependant — specified relatives of a deceased employee (widow, minor children, widowed mother, and others), with detailed age and dependency conditions varying by chapter.

Employee — anyone (except an Apprentices Act apprentice) employed on wages, directly or through a contractor, for any kind of work — excluding Armed Forces members. Different wage-ceiling and Schedule-based definitions apply for specific chapters (III, IV, and VII).

Employer — anyone employing one or more people, directly or indirectly, including factory occupiers, mine owners/managers, establishment controllers, contractors, and legal representatives of deceased employers.

Employment injury — a personal injury from an accident or occupational disease arising from and during employment, whether occurring in India or abroad (for Chapters IV and VII).

Establishment — any place carrying on industry, trade, business, or occupation; a factory, transport undertaking, newspaper establishment, construction site, or plantation; or a mine, port, or dock work area.

Exempted employee — under Chapter III, an employee otherwise covered by an exempted scheme; under Chapter IV, an employee whose notified wage exempts them from contribution.

Factory — premises with 10+ employees using power-driven manufacturing, or 20+ employees using non-power manufacturing (in either case, currently or in the preceding 12 months). Excludes mines, mobile military units, railway running sheds, hotels, restaurants, and eating places.

Family — a spouse; dependent minor children; children dependent on the employee’s earnings (until 21, if in education, or unmarried daughters); infirm dependent children; dependent parents (including in-laws, within an income limit); and, for unmarried employees without living parents, a dependent minor sibling.

Fixed term employment — employment under a written, time-bound contract, with pay, hours, and benefits at least equal to a permanent employee doing similar work, and proportional benefit eligibility regardless of qualifying-period length.

Gig worker — someone earning through work arrangements outside a traditional employer-employee relationship.

Home-based worker — someone producing goods or services for an employer from home or another self-chosen location, for pay, regardless of who supplies equipment or materials.

Inter-State migrant worker — someone recruited in one state for work in another, or who independently found work in another state, earning up to ₹18,000/month (or a higher notified amount).

Manufacturing process — processes like altering, treating, or adapting goods; pumping fluids; generating or transmitting power; printing or binding; ship construction/repair; cold storage; and other Central Government–notified activities.

Medical termination of pregnancy — termination permitted under the Medical Termination of Pregnancy Act, 1971.

Minor — someone under 18.

Miscarriage — expulsion of uterine contents before or during the 26th week of pregnancy, excluding miscarriage that is punishable under the Indian Penal Code.

Occupational disease — a disease listed in the Third Schedule as specific to a given employment.

Occupier (of a factory) — the person with ultimate control over factory affairs — a partner, a director (excluding independent directors), or a government-appointed manager for government-owned factories. For ships under repair in a hired dry dock, the dock owner is the occupier for most purposes.

Organised sector — any enterprise that isn’t part of the unorganised sector.

Permanent partial disablement — a permanent reduction in earning capacity across all employment the person could previously do; injuries in Part II of the Fourth Schedule are automatically classified this way.

Permanent total disablement — permanent incapacity for all work the person could previously do; automatically applies for Part I Fourth Schedule injuries, or combinations of Part II injuries totalling 100% earning-capacity loss.

Platform work — work arranged through an online platform connecting individuals/organisations to services or solutions, outside a traditional employer-employee relationship, in exchange for payment.

Platform worker — someone engaged in platform work.

Retirement — termination of service other than through superannuation.

Seasonal factory — a factory exclusively engaged in specific seasonal processes (cotton ginning/pressing, groundnut decortication, indigo/lac/sugar manufacture, and related processes), or operating no more than 7 months a year in a Central Government–specified process.

Self-employed worker — someone not employed by an employer, working in the unorganised sector within notified income or landholding limits.

Shop — as defined under applicable state shops-and-establishments law.

Sickness — a condition requiring medical treatment and necessitating absence from work.

Social security — protective measures ensuring healthcare access and income security for employees, unorganised workers, gig workers, and platform workers, particularly for old age, unemployment, sickness, invalidity, work injury, maternity, or loss of a breadwinner.

Superannuation — reaching the contractually fixed retirement age (58, for Chapter III purposes).

Temporary disablement — a condition from an employment injury requiring medical treatment and temporarily preventing the employee from doing their usual work.

Unorganised sector — enterprises owned by individuals or self-employed workers, employing fewer than 10 workers.

Unorganised worker — a home-based, self-employed, or unorganised-sector wage worker, including organised-sector workers not covered by the Industrial Disputes Act or Chapters III–VII of this Code.

Vacancy (Chapter XIII) — an unoccupied, paid post, including newly created posts, trainee posts, or apprentice posts.

Wages — total remuneration (basic pay, dearness allowance, retaining allowance) payable for employment, excluding: statutory bonuses outside the employment terms, housing/utility/medical amenities, employer pension/PF contributions and interest, conveyance allowance, special expense reimbursements, house rent allowance, court/tribunal-awarded remuneration, overtime, commission, gratuity, and retrenchment/retirement compensation. If excluded components exceed 50% of total remuneration, the excess counts back in as wages. For gender-equal pay calculations, house rent allowance, remuneration under awards/settlements, and overtime are included. In-kind remuneration up to 15% of total wages counts as wages.

Wage ceiling — the Central Government–notified wage threshold for Chapter III/IV membership.

Wage worker — someone paid for unorganised-sector work, directly or through a contractor, in any form (home-based, temporary, casual, migrant, or domestic), earning a Central/State Government–notified monthly wage.

Woman — a woman employed directly or through a contractor for wages. Under Chapter IV, an “insured woman” also includes a commissioning mother and a woman who’s legally adopted a child under 3 months old.

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