Social Security Legislations: formula sheet

Key formulas

Registration conditions (Section 113(1))

Registration requires: (a) age of sixteen years completed, or such age as the Central Government prescribes; and (b) a self-declaration in the prescribed form and manner

Applies to unorganised, gig and platform workers. Both conditions must be met.

Registration application (Section 113(2))

Application in prescribed form + documents including Aadhaar number → distinguishable number assigned

Self-registration through the government's electronic system is also provided for.

Benefit eligibility (Section 113(3))

Registered worker → eligible for benefit of the concerned scheme

Registration is the gateway to scheme benefits.

Aggregator contribution rate (Section 114(4))

1% ≤ rate ≤ 2% of annual turnover, as notified; contribution ≤ 5% of amount paid or payable to gig and platform workers

Applies to aggregators in categories in the Seventh Schedule. Annual turnover excludes tax, levy and cess paid or payable to the Central Government. Both limits apply.

Scheme subjects (Section 114(1))

Life and disability cover; accident insurance; health and maternity benefits; old age protection; creche; any other benefit

Schemes are framed and notified by the Central Government.

Funding sources of schemes (Section 114(3))

Central Government; Centre plus State; aggregators; mixed funding; CSR fund under the Companies Act, 2013; any other source

The scheme itself specifies which source applies.

Social Security Fund (Section 141(1))

Central fund sources: Section 109(3), Section 114(3), composition of offences and other central labour law funds; a separate account for each

Each account is spent only for its own purpose (Section 141(2) and (3)).

Section 9(1): meetings

Intervals + procedure + quorum = as prescribed by the Central Government

Applies to every Social Security Organisation and its Committees.

Section 9(2): authentication

Orders and decisions = authenticated by the head officer or other notified officer; other instruments = signature of officer authorised by order

Heads named include the CPF Commissioner, DG Labour Welfare, State Principal Secretary or Secretary (Labour).

Section 9(3): validity

Vacancy or defect in constitution alone ≠ ground to question any act or proceeding

The word 'merely' limits the protection.

Section 9(4): fee

Fee and allowances of members = as prescribed by the Central Government

Do not say the State sets them under Section 9.

NSSB (Section 6)

Chair: Union Labour Minister; Vice-Chair: Secretary, Labour Ministry; 40 nominated members; Member-Secretary: DG Labour Welfare; term 3 years; meets at least 3 times a year

The 40 nominees: 7 unorganised workers, 7 employers, 7 civil society, 3 from Parliament (2 Lok Sabha, 1 Rajya Sabha), 10 Central Ministries, 5 States, 1 Union territories.

State Board (Section 6)

Chair: State Labour Minister; Vice-Chair: Principal Secretary or Secretary (Labour); 1 Central member; 31 nominated members; Member-Secretary as notified; term 3 years; meets at least once a quarter

The 31 nominees: 7 workers, 7 employers, 2 Legislative Assembly, 5 civil society, 10 State departments.

Supersession (Section 11)

Opinion of inability, persistent delay or excess or abuse of power → show-cause opportunity → notification → reconstitution → report to the legislature within 3 months

Show cause comes before the notification.

Who may grant exemption

Appropriate Government, by notification, may exempt an establishment or class of establishments, or employees or class of employees, from any or all provisions of the Code or the scheme (section 143(1))

Exemption can be partial or full. It can be renewed by like notification.

Prior consultation

PF, Pension and Insurance Schemes: prior consultation with the Central Board. Chapter IV (ESI): prior consultation with the Corporation (section 143(1) provisos)

No grant or renewal without consultation. The body forwards its view within the time the Government prescribes.

Initial period of exemption

Initial period = 3 years from the date of publication of the notification (section 143(3))

It may be extended for the period prescribed by the Central Government. For the PF, Pension and Insurance Schemes, the extension period is as specified in those schemes.

Benefit test

Exemption only if employees get benefits substantially similar or superior to those under the Code or scheme (section 143(4))

This is the key condition. Quote it in every exemption answer.

Board of trustees

Employer constitutes a board of trustees, a legal entity that can sue and be sued (section 143(5))

It administers the fund, manages investments, keeps accounts, credits contributions and interest.

Returns and inspection

Exempted employer furnishes electronic returns, gives inspection facilities and pays inspection charges as directed by the Central Government (section 143(6))

Returns cover persons employed, accounts, and investments from the fund.

Cancellation and transfer

Failure to comply: appropriate Government may cancel. On cancellation, surplus, reserves and each employee's accumulations go to the statutory fund (section 143(7) and (8))

For PF, Pension and Insurance Schemes, time, form and manner of transfer are as in the respective schemes.

Surrender of exemption

Board of trustees' resolution, then employer applies to the appropriate Government to surrender from a specified date (section 143(9))

Accumulations, surplus and reserves are then transferred to the statutory funds.

Benefits (section 32)

Sickness + Maternity + Disablement + Dependants' + Medical + Funeral expenses

Six benefits. The first four are periodical payments. Qualification, rate and period of the cash benefits are prescribed by the Central Government.

Funeral expenses

Claim within 3 months of death; amount capped as prescribed by the Central Government

The Corporation or its authorised officer may allow an extended period.

Employer dispute deposit (section 49(2))

Deposit = 50% of the amount claimed by the Corporation

Needed before an employer raises a contribution or dues dispute in the Court. The Court may, for reasons recorded in writing, waive or reduce it.

Sickness benefit cost sharing (section 40(2))

Excess over all-India average incidence is shared between the Corporation and the State in the agreed proportion

The Corporation may waive the whole or part of the State's share.

Failure to agree (section 40(4))

No agreement → arbitrator appointed by the Central Government in consultation with the State Government

The arbitrator decides the nature and extent of treatment and the cost-sharing proportion.

Civil court bar (section 49(3))

No Civil Court jurisdiction over matters decided by a medical board, medical appeal tribunal or the Employees' Insurance Court

Quote this at the end of any dispute answer.

Gratuity (monthly-rated employee)

Gratuity = (15 ÷ 26) × last drawn wages (monthly) × completed years of service

Years: a part of a year above six months counts as a full year. Wages for gratuity are basic, dearness allowance and retaining allowance, if any. The divisor 26 is the standard working-day convention. Apply any ceiling the question gives.

Gratuity eligibility

Continuous service ≥ 5 years on superannuation, retirement or resignation

Not required on death or disablement. Fixed-term employees get gratuity pro rata. Do not assume a ceiling figure; use the one given in the question.

Average daily wage (s.60)

Average daily wage = wages payable for days worked in the 3 calendar months before absence ÷ number of days worked

Subject to the minimum rate of wage under the Code on Wages, 2019.

Qualifying service (s.60(2))

Actual work ≥ 80 days in the 12 months before expected delivery

Lay-off days and paid holidays count.

Maximum period (s.60(3))

26 weeks (not more than 8 before expected delivery); 12 weeks (not more than 6 before) if two or more surviving children

'Child' includes a stillborn child.

Adoption and commissioning mother (s.60(4))

12 weeks from the date the child is handed over

Adopted child must be below three months of age.

Leave under s.65

Miscarriage or MTP: 6 weeks; tubectomy: 2 weeks; illness from pregnancy etc.: up to 1 month extra

Paid at the rate of maternity benefit, on proof prescribed by the Central Government.

Central fund: purpose

Section 141(1): fund for unorganised workers, gig workers and platform workers

Established by the Central Government.

Three sources of the Central fund

(i) section 109(3) funding; (ii) section 114(3) funding; (iii) composition of Central offences and other central labour law funds

Learn them as clauses (i), (ii) and (iii).

Separate accounts

One account per source, spent only for that account's purpose (Section 141(2) and (3))

Money from one source cannot be used for another account's purpose.

Aggregator contribution rate

Not less than 1% and not exceeding 2% of annual turnover, as notified (Section 114(4))

Applies to aggregators in categories specified in the Seventh Schedule.

Cap on contribution

Contribution ≤ 5% of the amount paid or payable to gig and platform workers

This is a proviso to Section 114(4). Turnover excludes tax, levy and cess paid or payable to the Central Government.

Funding options for a scheme

Section 114(3)(a) to (f)

Central, Central plus State, aggregators, mixed with beneficiaries, CSR fund, or any other source.

State fund

Section 141(5): State fund for unorganised workers

Credited with State composition amounts and other prescribed sources.

Section 133 – non-payment of employee's contribution deducted from wages

Clause (a) offence, deducted amount not paid: imprisonment 1 year minimum, up to 3 years, plus fine of ₹1,00,000

The proviso lets the court impose a lesser term for adequate and special reasons recorded in the judgment.

Section 133 – failure to pay employer's contribution (other cases)

Clause (a), any other case: imprisonment 2 months minimum, up to 6 months, plus fine of ₹50,000

The same proviso on lesser sentence applies.

Section 133 – gratuity default

Clause (g): imprisonment up to 1 year, or fine up to ₹50,000, or both

Gratuity default has its own punishment tier.

Section 133 – middle tier

Clauses (d), (f), (i), (k), (l), (o): imprisonment up to 6 months, or fine up to ₹50,000, or both

Covers penalising a woman employee, obstructing an inspector, denying maternity benefit, not producing registers, building worker cess default, and dishonest false returns.

Section 133 – fine-only tier

Clauses (b), (c), (e), (h), (j), (m), (n), (p), (q): fine up to ₹50,000

Includes deducting employer's contribution from wages, failing to file returns, compensation default and residual contraventions.

Section 137 – prior opportunity

Written direction with time limit; compliance in time means no prosecution; repeat of same violation within 3 years means no opportunity

Three years run from the date of the first violation.

Section 72(3) – appeal period

Appeal within 30 days from communication of the order

Applies to orders of the Inspector-cum-Facilitator on maternity benefit complaints.

Quick revision

• The Code on Social Security, 2020 combines several earlier social security laws into one Code.
• Learn the definitions first; many answers turn on who is an employee or what counts as wages.
• Each scheme has its own governing body, so link each benefit to the body that administers it.
• The Employees' State Insurance Fund can be spent only for the purposes listed in section 26.
• Under section 26, the fund may meet benefits, medical care, hospitals, audit costs, court costs and other approved purposes.
• Spending on health, welfare and rehabilitation of insured persons is within limits set by the Central Government.
• Section 155 lets the Central Government make rules; many procedural details sit in those rules.
• Know the eligibility conditions for gratuity and maternity benefit, as small facts change the answer.
• Employee compensation deals with injury and death arising from work.
• Registration, contributions and inspection are the employer's core compliance duties.
• Always end a case answer with a clear conclusion on liability or entitlement.

Common mistakes

• Treating gig worker and platform worker as the same term. Fix: Learn the separate definitions in the Code. State that the same chapter provisions apply to both, but define each on its own.
• Saying aggregator contribution is a flat 2% of turnover. Fix: The rate is notified between 1% and 2% of annual turnover, and the contribution cannot exceed 5% of the amount paid or payable to gig and platform workers.
• Saying a decision is void because board seats were vacant. Fix: Quote Section 9(3): vacancy or defect in constitution alone is no ground. Quorum is a separate matter, set by the prescribed procedure.
• Mixing up the meeting frequency of the NSSB and the State Board. Fix: NSSB: at least thrice a year. State Board: at least once in a quarter.
• Writing the Employees' Provident Funds Act, 1952 as the governing law. Fix: Base answers on the Code on Social Security, 2020 and its schemes. Mention the 1952 Act only to contrast.
• Saying exemption is permanent. Fix: State that exemption is initially for three years from publication of the notification and can be extended.
• Writing exact contribution rates or wage ceilings as if fixed in the Code. Fix: Say that qualification, rate and period of benefits are prescribed by the Central Government, and use rates only if the question gives them.
• Saying the Corporation alone provides medical treatment. Fix: State that the State Government provides treatment under section 40(1), while the Corporation can also set up hospitals and contract with others.
• Rounding service years wrongly, for example treating 8 years 4 months as 9 years. Fix: Round up only if the extra period is more than six months; otherwise drop it.
• Denying gratuity on death because the employee had under five years of service. Fix: Always state the exception for death or disablement.

Exam tips

• Learn the numbers in Section 114(4): 1%, 2% and 5%. Examiners set short problems on them.
• Write the provision, analysis and conclusion in that order. Case-based answers lose marks for missing conclusions.
• Keep a list of definitions with their exact keywords, because definition questions reward precise wording.
• Link Sections 113, 114 and 141 in an answer on gig and platform workers: registration, schemes, then funding.
• Learn the NSSB and State Board numbers as a table in your head: 40 and 31, plus the named office-bearers.
• In case questions, always cite Section 9(3) when the facts mention vacancy, and then check for quorum.
• For supersession answers, write the steps in order: opinion, show cause, notification, reconstitution, report within three months.
• Use section numbers only where certain: 6, 9 and 11 are safe for this topic.