Ministry of Labour introduced code on social security bill 2019 in Lok Sabha. It amends and consolidates laws relating to social security of employees.

Major Provisions Under The New Labour Act:

  • It subsumes following eight Central Labour Acts:
  • Employees' Compensation Act, 1923
  • Employees State Insurance Act, 1948
  • Employees Provident Funds and Miscellaneous Provisions Act, 1952
  • Maternity Benefit Act, 1961
  • Payment of Gratuity Act, 1972
  • Cine Workers Welfare Fund Act, 1981 
  • Building and Other Construction Workers Cess Act, 1996
  • Unorganized Workers Social Security Act, 2008

  • It gives the option for reduction of Provident Fund contribution by employees from 12% to 10%.
  • Its purpose is to increase the take-home pay of employees.
  • The reduction will not apply to employers.
  • Social Security Fund: bill aims to set up the fund under corporate social responsibility to provide welfare benefits such as pensions, death and disability benefits.
  • It also provides for making fixed-term contract workers eligible for gratuity on a pro-rata basis. Currently, workers are not entitled to gratuity before completing five years of continuous service.

The need for the social security Bill, 2019

  • Social security of workers is a must for labour to function most efficiently. The new Social security Bill 2019 aims at providing general welfare services and benefits to the workforce especially the unorganised sector.
  • The reduction in the PF contribution is a bid to consumption 
  • The new Bill also takes into account the welfare of contract workers by making them eligible for gratuity, has reduced percentage of PF contribution of employees. It also has a provision for social security fund which will provide pension and other health benefits to workers.


The goal of the social security Bill is to make universalisation of social security for 50 Crore workers in the country. It’s a part of reform initiatives by labour ministry for labour welfare.

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