Setting Up of Business, Industrial and Labour Laws · The Code on Social Security, 2020

Code on Social Security 2020: Introduction and Definitions

Updated 11 October 2026 · Fact-checked

The Code on Social Security, 2020 consolidates several earlier social security laws into one Code. It extends to the whole of India. Its definitions, such as employee, wages, gig worker and platform worker, decide who gets benefits. To answer a question, state the provision, apply the definition to the facts, then conclude.

Understand Introduction and Definitions under Social Security Code

Before the Code, social security for workers was spread over several separate Acts, each with its own definitions and coverage. The Code on Social Security, 2020 brings these laws together in one Code. It is one of the four Labour Codes you study in Paper 3 Part II.

The Code covers organised workers, such as those under provident fund and state insurance, and also unorganised workers, gig workers and platform workers. The inclusion of gig and platform workers is a new feature, and examiners like to test it.

Extent and commencement (section 1). The Code extends to the whole of India. The Central Government can bring it into force on different dates for different provisions. Most of the Code was brought into force on 21 November 2025, including sections 1 to 14 and sections 17 to 141, subject to the exceptions stated in the notification. Section 142 came into force earlier, on 3 May 2021. Do not say that the whole Code started on one date without this nuance.

Applicability (section 1). Which Chapters apply to an establishment depends on the First Schedule, which sets thresholds. But there are three important rules. First, an establishment can opt in to Chapter III (provident fund) if the employer and majority of employees agree, and the Central Provident Fund Commissioner notifies it. Second, the same opt-in route exists for Chapter IV (state insurance) through the Director General of the Corporation. Third, once a Chapter applies to an establishment, it keeps applying even if the number of employees later falls below the threshold. The Central Government can also extend the Code to any establishment above a number it notifies, after giving at least two months' notice.

Key definitions. Definitions decide coverage. You must know them for employee, employer, wages, unorganised worker, gig worker, platform worker and aggregator. In this topic, the exact text supplied to us covers sections 1, 112, 113, 114 and 141. For the full definition clauses in section 2, learn them from the Code or the ICSI study material, and use their exact words in your answer. A good habit is to note what each definition includes and excludes.

Registration and schemes for gig and platform workers. Under section 113, a worker must be registered to get scheme benefits. The worker must have completed sixteen years of age (or such age as the Central Government prescribes) and must submit a self-declaration. An application includes the Aadhaar number, and a distinguishable number is assigned. Self-registration is allowed through the electronic system. Under section 114, the Central Government may frame schemes on life and disability cover, accident insurance, health and maternity benefits, old age protection and creche.

Key rules to remember

Extent of the Code (section 1): Extends to the whole of India; Commencement is by notification, and different dates may be set for different provisions.
Opt-in to Chapter III or IV (section 1): Employer + majority of employees agree → Commissioner / Director General may notify; Chapter III: Central Provident Fund Commissioner. Chapter IV: Director General of the Corporation.
Continued applicability (section 1): Once a Chapter applies, it continues even if employees fall below the First Schedule threshold; Do not say coverage ends when headcount drops.
Registration conditions (section 113): Completed 16 years of age, or such age as the Central Government prescribes + electronic or other self-declaration; Application is with documents including Aadhaar number. Self-registration is allowed.
Aggregator contribution (section 114(4)): 1% to 2% of annual turnover, but not more than 5% of amount paid or payable to gig and platform workers; Rate is notified by the Central Government. Tax, levy and cess paid to the Central Government are excluded from turnover.
Schemes for gig and platform workers (section 114(1)): Life and disability cover; accident insurance; health and maternity; old age protection; creche; other benefits; Schemes are framed and notified by the Central Government.
Social Security Fund (section 141): Central fund: separate accounts for three sources; Sources: section 109(3), section 114(3), and composition of offences and other central labour law funds. The State Government sets up its own fund for unorganised workers.

How to solve Introduction and Definitions under Social Security Code questions

Use this method for any question on the Code's scope, applicability or definitions.

1Read the question and mark what is asked: applicability, a definition, registration, or a scheme.
2Name the provision. Write the section number only if you are sure of it, such as section 1 for extent and applicability.
3State the rule in plain words with its exact conditions, for example age, self-declaration, or agreement of majority of employees.
4Apply the rule to the facts. Check the type of worker, the number of employees and who has taken which step.
5Check for exceptions or special rules, such as opt-in under section 1 or continued applicability when headcount falls.
6Write a clear conclusion in one sentence that answers the question asked.

Quickest way: Three-check method for applicability and registration questions

When to use it: Use it when a short case asks whether the Code or a scheme applies, or whether a worker can register.

Check who the person is: employee, unorganised worker, gig worker or platform worker.
Check the condition: threshold or opt-in for establishments; age and self-declaration for workers.
Check for a saving rule: continued applicability, or notification by the Central Government.
Write: Provision, Facts, Conclusion.

Common mistakes in Introduction and Definitions under Social Security Code

Saying the Code came into force on one date for all provisions.
Students remember 21 November 2025 and ignore the section 1 power to appoint different dates.
Fix: Write that commencement is by notification, with different dates possible, and that most provisions were brought into force on 21 November 2025.
Saying an establishment leaves the Code when employees fall below the threshold.
Students assume thresholds work both ways.
Fix: Remember section 1(8): once a Chapter applies at the first instance, it continues to apply.
Mixing up who notifies the opt-in for Chapter III and Chapter IV.
Both rules look alike.
Fix: Chapter III: Central Provident Fund Commissioner. Chapter IV: Director General of the Corporation. Both need agreement of the employer and majority of employees.
Treating gig workers as eligible for benefits without registration.
Students focus on the scheme and skip the registration step.
Fix: Under section 113(3), only a registered worker can avail scheme benefits. Registration needs completion of 16 years of age (or such age as the Central Government prescribes) and a self-declaration.
Writing the aggregator contribution as a flat 2% of turnover.
Students remember only the upper limit.
Fix: Write the range of 1% to 2% of annual turnover as notified, with the cap of 5% of the amount paid or payable to gig and platform workers.
Writing definitions from memory in loose words.
Students paraphrase and drop the conditions that carry marks.
Fix: Learn each definition in the Code's words, including what it includes and excludes, and quote its key phrases.

Worked examples

Example 1

Rohan works as a delivery partner and earns through an app. He is 17 years old. He wants to avail a social security scheme framed under the Code on Social Security, 2020. Advise him on registration.

Show the solution

Provision: section 113 requires every unorganised worker, gig worker or platform worker to be registered, subject to two conditions.
Condition 1: the worker must have completed sixteen years of age, or such age as the Central Government prescribes. Rohan is 17, so this is met.
Condition 2: the worker must submit a self-declaration electronically or otherwise, in the prescribed form and manner. Rohan must do this.
Process: he applies in the prescribed form with documents including his Aadhaar number. A distinguishable number is assigned. Self-registration through the electronic system is also allowed.
Effect: under section 113(3), a registered worker is eligible to avail the benefit of the scheme.

Answer: Rohan meets the age condition. Once he submits a self-declaration and applies with his Aadhaar number, he can be registered, and only then can he avail scheme benefits.

Example 2

Sunrise Textiles Ltd had 25 employees when a Chapter of the Code first applied to it. It later reduced staff to 12, which is below the threshold in the First Schedule. The employer argues that the Chapter no longer applies. Is the employer correct?

Show the solution

Provision: section 1(4) says the Chapters apply as set out in the First Schedule, which sets thresholds.
Assumption: the facts do not say how the Chapter first applied, so we assume it applied at the first instance under the First Schedule threshold, when the establishment had 25 employees.
Special rule: section 1(8) says an establishment to which any Chapter applies at the first instance continues to be covered even if the number of employees later falls below the threshold.
Application: the fall to 12 is a later change. It does not end applicability.
Alternative: if the Chapter was Chapter III or IV and applied by agreement under section 1(5) or (7), the employer still cannot simply declare it inapplicable. It must apply under the proviso to the Central Provident Fund Commissioner or the Director General of the Corporation, who must be satisfied that the employer and majority of employees agree to the opt-out.

Answer: On the assumption that the Chapter applied at the first instance under the First Schedule, the employer is not correct. Under section 1(8), the Chapter continues to apply even though employees fall below the threshold. If it had applied by agreement, the employer would have to follow the opt-out procedure in the proviso.

Exam tips

Learn section 1 closely. Extent, commencement, opt-in and continued applicability are easy marks and are often tested as short cases.
Keep a one-line list of the five benefit areas in section 114(1) for gig and platform workers.
Write the aggregator contribution range and its cap together. Examiners like to see both limits.
For definitions, quote the Code's words and add what is included or excluded. Never write only a general meaning.
End every case answer with a clear one-line conclusion after the provision and the facts.

Practice questions from The Code on Social Security, 2020

Introduction and Definitions under Social Security Code in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Introduction and Definitions under Social Security Code: frequently asked questions

What is the Code on Social Security, 2020?

It is a Labour Code that brings several social security laws into one Code. It covers organised workers as well as unorganised, gig and platform workers.

When did the Code on Social Security come into force?

Section 1 lets the Central Government appoint different dates for different provisions. Most provisions, including sections 1 to 14 and sections 17 to 141 (subject to the exceptions in the notification), were brought into force on 21 November 2025. Section 142 came into force earlier, on 3 May 2021.

Who can register as a gig worker or platform worker?

Under section 113, the worker must have completed sixteen years of age, or such age as the Central Government prescribes, and must submit a self-declaration. The application includes the Aadhaar number, and self-registration is allowed.

How much must aggregators contribute under the Code?

Under section 114(4), the rate is notified by the Central Government and lies between 1% and 2% of annual turnover. The contribution cannot exceed 5% of the amount paid or payable to gig and platform workers.

Does a Chapter stop applying if employees fall below the threshold?

No. Under section 1(8), an establishment to which a Chapter applies at the first instance continues to be covered even if the number of employees later falls below the First Schedule threshold.