The Code on Social Security 2020 Explained (2026)

Explainer · Labour Law · India

Updated for 2026 · Claw Editorial

The Code on Social Security, 2020 brings provident fund, employees state insurance, gratuity, maternity benefit and employees compensation under one law, and for the first time builds a social security framework for gig and platform workers. It replaces nine old laws. The four labour codes, including this one, were brought into force on 21 November 2025, with several provisions and rules rolling out in stages. This explainer covers what the Code changes, who it covers, and the new rules on gig workers, gratuity and benefits. Last verified October 2026.

01Why a new social security law

Social security in India was spread across many separate laws, each with its own coverage, its own fund and its own authority. Large parts of the workforce, especially those outside regular factory and office jobs, fell through the gaps. The rise of app-based and platform work made this worse, because those workers fit none of the old categories.

The Code on Social Security, 2020 pulls the main benefit laws together and, crucially, creates a route to extend benefits to unorganised, gig and platform workers.

02What the Code consolidates

The Code consolidates nine central laws. The main ones are:

• the Employees Provident Funds and Miscellaneous Provisions Act, 1952;
• the Employees State Insurance Act, 1948;
• the Payment of Gratuity Act, 1972;
• the Maternity Benefit Act, 1961;
• the Employees Compensation Act, 1923; and
• the Unorganised Workers Social Security Act, 2008, among others.

So provident fund, insurance, gratuity, maternity benefit and compensation now sit in one statute, with common definitions.

03Provident fund, ESI and compensation

Provident fund continues under a Central Board of Trustees, and employees state insurance under the Employees State Insurance Corporation. The Code widens ESI coverage, allowing it to extend across the country and to hazardous work even with a single employee, and it lets smaller establishments opt in. Employees compensation for injury or death arising out of employment also continues within the Code.

Because the Code on Wages definition of wages flows through here, the base on which provident fund and gratuity are calculated can change, which affects both contributions and payouts.

04Gratuity and maternity benefit

For regular employees, gratuity is still payable after five years of continuous service. The important change is for fixed-term employees: they become entitled to gratuity on a pro-rata basis after one year of service, without the five-year requirement.

Fixed-term workers now earn gratuity pro-rata after one year, a real shift from the old five-year rule.

Maternity benefit of 26 weeks is carried over. The common wage definition again matters, because gratuity is calculated on wages as defined by the Code.

05Gig and platform workers: the new cover

This is the headline reform. The Code defines gig workers and platform workers and lets the central government notify social security schemes for them, covering matters such as life and disability cover, accident insurance, health and maternity benefits, and old age protection.

To help fund these schemes, aggregators in notified categories must contribute to a Social Security Fund. The contribution is between 1 and 2 percent of the aggregator's annual turnover, subject to a cap of 5 percent of the amount paid or payable by the aggregator to gig and platform workers. The exact rate and the start date of the obligation are set by government notification.

06Funds, registration and forum

The money flows into a Social Security Fund that pays for welfare schemes. Unorganised, gig and platform workers register on a designated portal to access benefits, and aggregators have duties to register the workers they engage. Disputes and claims go before the social security organisations and authorities set up under the Code, with appeals as provided.

For employers and platforms, the practical task is to map their workforce to the right category, get registrations in order, and track the contribution rules as the rates are notified.

07Where Claw fits

Claw is an all-in-one legaltech platform for Indian advocates, law firms, and corporate legal teams, combining AI-based case search, an AI legal assistant (Legal GPT), case management, and compliance automation across all Indian courts and tribunals.

A benefit claim under the Code, whether it is about provident fund, ESI, gratuity or the new aggregator contribution for gig workers, can travel from a departmental authority to a tribunal and up to the High Court. Claw keeps that journey in view: it follows the orders and hearing dates of your matter across the 9,102 courts, benches and forums it tracks, and lets you read how the older PF, ESI and gratuity laws were applied, since its library of more than 30 crore judgments reaches back to Supreme Court rulings from 1950 and High Court rulings from 1990, returning in under 5 seconds.

Claw does not use customer case documents to train AI models, so a client file you upload stays confidential. Create a free Claw account to follow a social security matter by party or advocate name. For the wider picture, see the four new labour codes, or run case search across Indian courts.

08Sources and further reading

• Ministry of Labour and Employment: labour.gov.in
• PRS Legislative Research (Code on Social Security, 2020): prsindia.org
• India Code (official statute text): indiacode.nic.in
• Claw: clawlaw.in

This explainer is general information, not legal advice. The codes are being rolled out in stages and rules differ by state, so check the current notifications and take advice from counsel before you act.

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