The Social Security Fund, Aadhaar and Exemptions

In one line

A national fund for unorganised, gig and platform workers, an Aadhaar requirement for anyone claiming a benefit, a power to exempt an establishment which already does better, and an emergency power to defer contributions in a pandemic.

In exam wording: section 141 of the Code on Social Security 2020 establishes Social Security Funds at the Central and State levels for unorganised, gig and platform workers; section 142 requires identity to be established through the Aadhaar number for registration, benefits and withdrawals; section 143 empowers the appropriate Government to exempt an establishment whose employees receive substantially similar or superior benefits; and section 144 permits deferment or reduction of contributions in a pandemic, endemic or national disaster.

Why the law has these at all

Four different problems, and the fourth is the one that dates the Code.

The Chapter IX schemes need a fund to be paid out of, and the money comes from several sources at once. Section 141 builds it and, importantly, keeps the sources in separate accounts.

A benefit paid to the wrong person is a benefit denied to the right one, and the workers Chapter IX covers have no employer records to identify them. Section 142 answers that with Aadhaar.

Some employers already do better than the Code requires, and forcing them into the statutory scheme would reduce what their workers get. Section 143 lets them out, on conditions.

And section 144 is the Code answering the pandemic in which it was passed. It was enacted in September 2020, and it gives the Central Government power to defer or reduce contributions in the event of a pandemic, endemic or national disaster. Very few Indian labour statutes carry such a provision, and it is worth naming as a salient feature.

Some words this chapter uses

Aggregator is defined in section 2(2). Composition of an offence is the settlement of a criminal charge by payment, under section 138. Aadhaar is defined for this purpose in section 2(a) of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act 2016. Resident for that Act's purposes is defined in its section 2(v). Exemption here means release from provisions of the Code, not from the duty to do better. Endemic describes a disease constantly present in a population; a pandemic is one spread across countries.

Section 141: the Social Security Fund

Section 141(1), the Central Fund and its three sources. The Central Government shall establish a Social Security Fund for the social security and welfare of unorganised workers, gig workers and platform workers, comprising funding received:

• (i) under section 109(3), the funding of Central schemes for unorganised workers;
• (ii) under section 114(3), the funding of schemes for gig and platform workers, which is where the aggregator contribution under section 114(4) arrives;
• (iii) from the composition of offences under this Code relating to the Central Government, and from any other Social Security Fund established under any other central labour law.