Introduction – Social Security Code employer compliance
On 21.11.2025, the Code of Social Security, 2020 (“Code”) became completely operationalised. The Code became a comprehensive law governing the aspects of social security and benefits available to the employees in an organisation. The Code compiles the pre-existing labour laws such as the Employees’ Provident Funds Act, 1952; Employees’ State Insurance Act, 1948; and Maternity Benefit Act, 1961, into a comprehensive safety net for organized and unorganized workers, including gig and platform workers. The compilation of the laws enables ease of doing business by streamlining the laws in a single code. The non-compliance of the code is subject to severe legal risks such as fines up to ₹2 lakh, imprisonment up to two years, or both, plus damages and interest.
This article highlights and acts as a compliance tracker for the employer on the aspects of the newly implemented Code. The article provides a detailed analysis of the employer-centric action to ensure seamless implementations and risk mitigation based on the regulatory requirements provided under the Chapters III to VIII and related provisions which focuses on proactive steps for provident funds, insurance, gratuity, maternity, compensation, and welfare schemes.
From a regulatory standpoint, employers must carefully assess their Social Security Code employer compliance obligations to ensure timely registration, contribution payments, and adherence to employee welfare requirements under the Code on Social Security, 2020.
1. Establishment Registration: Start with the Registration
The registration of the entities under the Code begins with the compliance with the statutory filings. Any —delays in the statutory requirements for registration can trigger penalties. In order to prevent any negative actions, the employer must ensure the following:
- Registration of establishment: All establishments which are falling under the purview of the Code must register itself within 60 days of commencement via the either electronically or otherwise. The establishment which are already registered need not register themselves under the new Code.
- Update on changes: In the event that the establishment is subject to closure, the establishment must make an application in the manner prescribed under the law fo cancellation of registration.
Tip: Establish a mechanism for the auto compliance of the EPF/ESI to prevent imposition of ₹50,000 fines.
Timely establishment registration is a critical element of social security compliance for employers in India, particularly where multiple welfare schemes are linked to the unified labour law portal.
2. Employees’ Provident Fund (EPF): Fund Retirement Security
The EPF requirements under the Code is mandatory for establishments with the number of employees being 20 or more employees:
- Deduct and contribute: The Code mandates that the employer contributes 10–12% of the employees’ wages and the employee to contribute 10% of their wage towards EPF. The EPF remittuance shall be made on a monthly basis by the 15th via ECR portal.
- Prioritise payments: The Code mandates that the EPF in the establishment shall supersede other debts in insolvency.
These requirements form the foundation of EPF compliance under the Social Security Code and require employersto maintain accurate payroll and contribution records.
Pro Tip: Opt for voluntary coverage in seasonal or low-wage sectors.
3. Employees’ State Insurance (ESI): Health and Disability Cover
The provisions under the ESI applies to all establishments which are having 10 or more employees. The obligations under the ESI are as follows:
- Insure all employees: The employees earning a wage of ₹21,000/month are covered under the ESI requirement. The remittance is a contributions of 0.75% employee and 3.25% employer contributions by the 15th of the month.
- Report incidents: The establishment must notify of any accidents or deaths within 24 hours and must also provide medical exams and benefits.
- Promote welfare: The Code provides that a safe workplaces shall be maintained in the establishment and provides the provisions to reimburse and recovery from wages.
- Handle disputes: ESI Courts resolve any disputes arising out of ESI and the appeal for ESI matter shall be under the jurisdiction of the High Court.
Employers should therefore review their internal HR policies to ensure EPF and ESIC compliance under Social Security Code requirements.
4. Gratuity Payments: Reward Long Service
The provisions shall be applicable on employees who with 5+ years of continuous service and 1 year for fixed-term employees. The provisions applicable on gratuity are as follows:
- Calculate and pay: The calculation of the gratuity is conducted based on 15 days’ wages for each completed year, on the last drawn salary and is capped at ₹20 lakh. The gratuity shall be paid within 30 days of exit.
- Nomination process: The employee may nominate name of any as such person for its gratuity.
- Determine dues: Respond to claims within 30 days and appeals to Appellate Authority with 10% deposit.
Gratuity payments also form an important component of employee benefits compliance under the Social Security Code, requiring employers to maintain proper nomination and payment records.
5. Maternity Benefits: Support Working Mothers
The provision for maternity benefits applies to all establishments with 10 or more employees:
- Grant leave: The provisions mandate that the female employee undergoing pregnancy shall be entitled to 26 weeks paid leave. However, such leave is subject to change based on the number of offsprings and other facts.
- Provide facilities: If the employer does not provide any pre-natal confinement and post-natal care then the female employee is entitled to ₹3,500+ as medical bonus. The female employee shall also be entitled to 2 nursing breaks per day for a duration as prescribed by the government. Every employer is obligated to have crèche facilities for female employees if such organisation has more than 50 female employees.
- Prohibit discrimination: No female employee shall be dismissed for absence during availing of the maternity benefits under the Code. The employer must also grant the female employee the opportunity to work-from-home during such period if the nature of work permits it.
- Display abstracts: Exhibit rules conspicuously; facilitate Inspector directives for payments.
Employers must ensure maternity-related benefits are implemented in line with broader labour law compliance under Social Security Code obligations.
Tip: For miscarriage, the employer is mandated to grant a 6 weeks’ leave to the female employee.
6. Employees’ Compensation: Cover Workplace Injuries (Chapter VII, Sections 73–92)
Liability for all employment injuries, including the injury occurring due to occupational diseases:
- Report accidents: Any fatal injury must be reported within 7 days. The employer must further undertake to conduct medical exams within 3 days.
- Pay compensation: The employer is required to pay a lump sum or half-monthly compensation which shall be based on age and wages of the concerned employee.
- Contractor liability: Principal employer vicariously liable for any injury. The employer may however by their own actions recover from the compensation amount from the sub-contractors.
These compensation obligations highlight the importance of workplace risk management within the Social Security Code employer compliance framework.
Pro Tip: Exclude only wilful misconduct; notices via registered post; appeals within 90 days with 50% deposit.
7. Welfare Schemes for Unorganized, Gig, and Platform Workers
The Code extends the coverage to non-traditional employment such as gig workers. The specific provisions are reproduced hereinbelow:
- Register platforms: Employers are mandatorily required to register Gig and platform employers on the government portal.
- Fund contributions: Employers are now required to contribute 1-2% of their annual turnover.
- Voluntary schemes: Ensure Aadhaar-linked portals to ensure transferability.
8. Record-Keeping and Reporting: Ensure Transparency
The employer is required to maintain its documentation with respect to the compliance with the Code. This ensures that the employer is audit –ready. The provisions for maintaining of records are as follows:
- Maintain registers: The employer must maintain a register which contains details which include but is not limited to employee details, contributions and nominations.
- File returns: The employer is required to maintain a monthly and quarterly reporting of the compliance under the Code.
- Facilitate inspections: Provide mechanism for granting access to Inspector-cum-Facilitator access.
Maintaining accurate employment records and contribution registers is a core requirement for effective social security compliance for employers.
Tip: Electronic submissions are mandatory in nature and protect employer against the statutory fines.
9. Dispute Resolution and Recovery: Resolve Proactively
The establishment must maintain a structured mechanisms to prevent the risk arising from dispute. However, the code provides for specific mechanism for dispute resolution:
- Assess dues: The relevant authority has the power to post-hearing; determine the recovery mechanism. The aggrieved party to the order of the authority may file its appeals with 25% deposit as fee for the appeal.
- Recovery modes: The following compensation may be issued for recovery which include damages along with Interest and attachment or garnishee order.
- Composition: The relevant authority may issue penalty based on the degree of violation which are minor in nature.
Pro Tip: Pre-prosecution notice for first offences; joint liability on transfers.
10. Penalties and Compliance Safeguards: Avoid Escalation
The penalties in the Code are fine and imprisonment. The Code also provides provisions for providing the grace periods:
- Fines/imprisonment: The Code provides a fine of ₹2 lakh or 2 years of imprisonment or both for non compliance. It further provides that repeated offences may compound the fine for repeated offences.
- Deferrals: The Central Government can grant relief during disasters.
- No contracting out: The Code creates a statutory requirement and thereby, no agreement between the employer and employee can waive Code rights.
Action: The employer must ensure that it has regularly complied with the regulatory compliance as the good faith actions may grant protection under the law while the non-compliance may create burden on employer its prove compliance.
Frequently Asked Questions (FAQs) – Social Security Code employer compliance
1. What is the Code on Social Security, 2020?
The Code is a unified law of the pre-existing laws in India dealing with the social security which aims to provide comprehensive regulation governing the EPF and maternity benefits in India. The Code has been established to promote ease of doing.
2. Which establishments are required to comply with the Social Security Code?
The Code applies to all establishments. However, the Code also provides specific number of workers for certain provisions such as EPF which applies to establishments employing 20 or more employees.
3. What are the key employer obligations under the Code on Social Security?
Employers must ensure timely registration of establishments under the Code if not already registered. It must also provide for the payment of statutory contributions such as EPF and ESIC, maintenance of employee records, reporting of workplace injuries, payment of gratuity and maternity benefits
4. Does the Social Security Code cover gig workers and platform workers?
Yes, the Code applies to gig workers and platform workers with respect to the social security.
5. What penalties apply for non-compliance with the Social Security Code?
The Code provides fines for the violation of the provisions which provides that failure to comply with the provisions of the Code may result in fines up to ₹2 lakh, imprisonment up to two years, or both. It also provides additional penalties which may include interest and damages on unpaid contributions.
Conclusion – Social Security Code employer compliance
The Code is a positive step towards the ease of compliance and aims to provide a comprehensive regulation encapsulating all the developments in the previous law that were governing thesocial security. The Code aims to shift the regulatory framework from reactive to inclusive, placing employers at the helm of a resilient workforce. While, the rules are getting finalised, it is crucial for the establishments to prioritise portal integrations, timely remittances, audits and the compliance regulatory mappings.
Corrida Legal excels in Code compliance: from registrations to grievance handling. Contact us for audits, scheme enrolments, or training sessions.
Disclaimer: This summary is informational and not legal advice. Consult the full Code and professionals for specific scenarios.
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