Setting Up of Business, Industrial and Labour Laws · The Code on Social Security, 2020
Social Security Fund and Schemes for Gig Workers
Updated 11 October 2026 · Fact-checked
The Social Security Fund under Section 141 is a Central Government fund for unorganised, gig and platform workers. It has three sources, each kept in a separate account and spent only for its own purpose. Gig and platform schemes under Section 114 can be funded by governments, aggregators, CSR or other sources.
Understand Social Security Fund and Schemes for Gig and Unorganised Workers
The Code on Social Security, 2020 does not stop at employees in organised establishments. It also covers unorganised workers, gig workers and platform workers. These groups have no employer paying provident fund or insurance, so the Code creates schemes and a fund for them.
The Social Security Fund is set up by the Central Government under Section 141(1) for the social security and welfare of these three groups. It draws money from three sources: funding under Section 109(3), funding under Section 114(3), and composition of offences under the Code relating to the Central Government, plus any other Social Security Fund under another central labour law.
The key rule is separation. Section 141(2) requires a separate account for each of the three sources. Section 141(3) says the fund is spent only for the purposes for which each account was set up. You cannot move money freely between accounts. The fund is run in the manner prescribed by the Central Government.
Section 114 deals with schemes for gig and platform workers. The Central Government may frame and notify schemes on life and disability cover, accident insurance, health and maternity benefits, old age protection, creche, and any other benefit it decides. Funding can come from the Centre, the State, aggregator contributions, beneficiary contributions, CSR funds or any other source.
The aggregator contribution is the part most examined. It is a percentage of the aggregator's annual turnover, with a cap linked to what the aggregator pays to gig and platform workers. States also set up their own fund for unorganised workers under Section 141(5).
Key rules to remember
- Aggregator contribution rate (Section 114(4))
- Contribution = a rate notified by the Central Government, not less than 1% and not exceeding 2%, of the aggregator's annual turnover
- Applies to aggregators in a category specified in the Seventh Schedule. Annual turnover excludes tax, levy and cess paid or payable to the Central Government.
- Cap on contribution (proviso to Section 114(4))
- Contribution ≤ 5% of the amount paid or payable by the aggregator to gig workers and platform workers
- The payable contribution is therefore the lower of the turnover-based amount and this cap.
- Sources of Central Social Security Fund (Section 141(1))
- (i) Section 109(3) funding; (ii) Section 114(3) funding; (iii) composition of Central offences and other central labour law funds
- A separate account for each source (Section 141(2)). Spend only for that account's purpose (Section 141(3)).
- Matters for gig and platform schemes (Section 114(1))
- Life and disability cover; accident insurance; health and maternity benefits; old age protection; creche; any other benefit
- The Central Government 'may' frame and notify schemes. It is not a compulsion.
- State fund (Section 141(5))
- Credited with: composition of State offences + other sources prescribed by the State Government
- Used for welfare of unorganised workers only, as prescribed by the State.
How to solve Social Security Fund and Schemes for Gig and Unorganised Workers questions
Most questions ask you to explain the fund, a scheme or the aggregator contribution, or to apply the contribution rule to figures. Use this method.
- 1Identify the worker group: unorganised, gig or platform. The State fund covers unorganised workers only.
- 2Name the provision: Section 141 for the fund, Section 114 for gig and platform schemes, Section 112 for helpline and facilitation centres.
- 3State the rule in plain words: who sets up the fund, the three sources, the separate accounts and the purpose of spending.
- 4For funding of a scheme, list the options in Section 114(3): Centre, Centre plus State, aggregators, mixed, CSR, any other source.
- 5For a numerical question, compute the contribution at the rate asked on turnover after excluding Central tax, levy and cess, then test it against the 5% cap on payments to gig and platform workers.
- 6Check the rate band: not less than 1% and not exceeding 2%. Check whether the aggregator is in a Seventh Schedule category and whether an exemption notification applies.
- 7End with a clear conclusion that answers the exact question asked, citing the section.
Quickest way: Three-line recall for Sections 141 and 114
When to use it: Use when you have little time and need a structured answer for a short-note or theory question.
- Fund: Central Government sets it up, three sources, three separate accounts, spent only for the matching purpose.
- Schemes: Central Government may notify schemes on six heads (life and disability, accident, health and maternity, old age, creche, other).
- Aggregator money: 1% to 2% of annual turnover (ex Central tax, levy, cess), capped at 5% of payments to gig and platform workers; date of commencement is notified.
Common mistakes in Social Security Fund and Schemes for Gig and Unorganised Workers
Writing that the contribution is a flat 2% of turnover.
Students remember only the upper limit.
Fix: Write the band: not less than 1% and not exceeding 2%, as notified by the Central Government.
Ignoring the 5% cap on payments to gig and platform workers in a numerical question.
The cap sits in a proviso and is easy to overlook.
Fix: Always compute both figures and take the lower one.
Including Central taxes, levies and cess in annual turnover.
Students use the gross turnover given in the question.
Fix: Deduct tax, levy and cess paid or payable to the Central Government, as the Explanation to Section 114(4) says.
Saying all fund money can be pooled and used for any worker welfare.
The word 'fund' suggests one common pot.
Fix: Cite Section 141(2) and (3): separate accounts, each spent for its own purpose.
Treating the Central fund and the State fund as the same.
Both are in Section 141.
Fix: The Central fund covers unorganised, gig and platform workers (sub-section (1)). The State fund covers unorganised workers only and comes from State composition fees and prescribed sources (sub-section (5)).
Stating that schemes for gig workers must be wholly funded by aggregators.
Aggregator contribution gets most attention.
Fix: Section 114(3) lists several funding models, including Central, State, CSR and other sources.
Worked examples
Example 1
An aggregator in a Seventh Schedule category has annual turnover of ₹500 crore, which includes ₹20 crore of tax, levy and cess paid to the Central Government. It pays or owes ₹40 crore to gig and platform workers. The notified rate is 2%. Find the contribution payable under Section 114(4).
Show the solution
- Turnover for the purpose = ₹500 crore − ₹20 crore = ₹480 crore.
- Contribution at 2% = ₹480 crore × 2% = ₹9.6 crore.
- Cap = 5% of ₹40 crore = ₹2 crore.
- The contribution must not exceed the cap, so the lower figure applies: ₹2 crore.
Answer: The aggregator pays ₹2 crore. The turnover-based figure of ₹9.6 crore is cut down by the proviso to Section 114(4), which limits the contribution to 5% of the amount paid or payable to gig and platform workers.
Example 2
Explain the sources and use of the Social Security Fund established under Section 141 of the Code on Social Security, 2020.
Show the solution
- Provision: Section 141(1) requires the Central Government to establish a Social Security Fund for the social security and welfare of unorganised, gig and platform workers.
- Sources: funding under Section 109(3); funding under Section 114(3); and composition of Central offences under the Code and any other Social Security Fund under another central labour law.
- Accounts: Section 141(2) requires a separate account for each of the three sources.
- Use: under Section 141(3) the fund is spent only for the purposes for which each account was set up. Under Section 141(4) it is established and administered as prescribed by the Central Government.
- State level: Section 141(5) requires each State Government to establish a fund for unorganised workers, credited with composition of State offences and other prescribed sources.
Answer: The Central fund has three sources, each in a separate account, and money is used only for the purpose of that account. States keep their own fund for unorganised workers.
Exam tips
- Learn the numbers exactly: 1% minimum, 2% maximum of annual turnover, 5% cap on payments to gig and platform workers.
- In theory answers, quote the section numbers 141, 114, 112 and 6 where they fit. It shows precise knowledge.
- For funding questions, list the Section 114(3) options as short bullets and add that a scheme may specify its own mix.
- Do not mix up Central Board and State Board details. Section 6 gives the National Social Security Board and State Unorganised Workers' Boards. For gig and platform matters, Section 114(6) changes the Board's composition.
- In case-style questions, finish with a one-line conclusion giving the final amount or the legal position.
Practice questions from The Code on Social Security, 2020
- Meera Foods Ltd, Pune, refused to pay a worker the gratuity to which he was entitled under the Code on Social Security, 2020. Which punishme…
- Under the Code, the State Unorganised Workers' Social Security Board of a State is reviewing its work. Which function is assigned to it?
- An officer of ESIC asks who operates the bank account styled the account of the Employees' State Insurance Fund. Under the Code on Social Se…
- A State Government composes several offences under the Code relating to the State Government. Into which fund is the amount received credite…
- Which of the following is a source of the Social Security Fund established by the Central Government for unorganised, gig and platform worke…
Social Security Fund and Schemes for Gig and Unorganised Workers in other exams
The same ground in other exams, if you are preparing for more than one or want another angle on it.
Social Security Fund and Schemes for Gig and Unorganised Workers: frequently asked questions
What is the Social Security Fund under the Code on Social Security, 2020?
It is a fund established by the Central Government under Section 141 for the social security and welfare of unorganised, gig and platform workers. It is fed by three sources and kept in three separate accounts. Each account is spent only for its own purpose.
How much must aggregators contribute for gig workers?
The Central Government notifies a rate of not less than 1% and not more than 2% of annual turnover for aggregators in Seventh Schedule categories. The contribution cannot exceed 5% of the amount paid or payable to gig and platform workers. The commencement date is also notified by the Central Government.
Can the Central Government exempt aggregators from contributing?
Yes. Under Section 114(7)(ii), it may by notification exempt an aggregator or a class of aggregators from the contribution, subject to conditions in the notification.
Which schemes can be framed for gig and platform workers?
Under Section 114(1), the Central Government may notify schemes on life and disability cover, accident insurance, health and maternity benefits, old age protection, creche, and any other benefit it determines.
What is the role of the helpline under Section 112?
The appropriate Government may set up a toll free helpline or facilitation centres. They give information on schemes, help with registration applications and help workers enrol in schemes.