Architecture: what the Social Security Code covers

The Code on Social Security, 2020 is Act 36 of 2020. It consolidates nine Central enactments into 14 chapters and 164 sections, with seven schedules. Its purpose is to organise social-security coverage, administration and financing; it does not make every benefit identical for every worker.

Chapter	Subject	Revision focus
I–II	Preliminary provisions and social-security organisations	Definitions; First Schedule; Central Board, ESIC and welfare boards
III	Employees’ provident fund	EPF, pension and deposit-linked insurance schemes
IV	Employees’ State Insurance	Contributions, insurance benefits and administration
V	Gratuity	Continuous service; entitlement and calculation
VI	Maternity benefit	Eligibility, leave, protection and facilities
VII	Employees’ compensation	Employment injury, occupational disease and compensation
VIII	BOCW social security and cess	Welfare finance and beneficiary eligibility
IX	Unorganised, gig and platform workers	Schemes, registration and aggregator financing
X–XI	Finance/accounts; authorities, assessment and recovery	Funds, audit, Inspector-cum-Facilitator and dues
XII–XIV	Offences; career centres; miscellaneous	Penalty, vacancy reporting, savings and repeal

Nine old Acts: the consolidation map

• Employees’ Compensation Act, 1923
• Employees’ State Insurance Act, 1948
• Employees’ Provident Funds and Miscellaneous Provisions Act, 1952
• Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959
• Maternity Benefit Act, 1961
• Payment of Gratuity Act, 1972
• Cine-workers Welfare Fund Act, 1981
• Building and Other Construction Workers’ Welfare Cess Act, 1996
• Unorganised Workers’ Social Security Act, 2008

Definitions and applicability

An employee can be engaged directly or through a contractor; the Code contains exclusions, including apprentices under the Apprentices Act and members of the Armed Forces. A gig worker earns through work outside a traditional employer–employee relationship. Platform work uses an online platform to access or provide specified services outside that traditional relationship. An aggregator is the digital intermediary or marketplace connecting users and service providers.

Area	Baseline establishment trigger	Important qualification
EPF chapter	20 or more employees	Notification, voluntary coverage, scheme eligibility and wage ceiling matter
ESI chapter	10 or more persons, subject to scheduled scope	Special hazardous coverage and notified extensions may apply
Gratuity	Specified factories, mines, oilfields, plantations, ports, railway companies; covered shops/establishments at 10 employees	Check the First Schedule and continuing-coverage rule
Maternity	Specified factories, mines and plantations; covered shops/establishments at 10 employees	Eligibility and ESI interaction must be checked separately
BOCW welfare	Covered construction work and registered beneficiaries	Do not confuse construction safety with construction cess

Headcount is not the same as the wage ceiling. First ask whether the establishment is covered, then whether the person and benefit fall within the relevant chapter and scheme.

Wages and the 50% add-back

The wages definition starts with remuneration and expressly includes basic pay, dearness allowance and retaining allowance. It excludes specified items. If exclusions covered by the statutory 50% proviso exceed half of the relevant remuneration, the excess is added back. Read the exact clause list rather than adding every reimbursement or termination payment indiscriminately.

Worked illustration: assumed relevant remuneration is ₹40,000, included components ₹16,000 and exclusions covered by the proviso ₹24,000. Half of remuneration is ₹20,000; the excess exclusion is ₹4,000. Wages for this illustration become ₹20,000. This is an assumed statutory-component example, not a claim that basic salary must itself be 50% of CTC.

EPF, EPS and EDLI: three benefits, three purposes

Scheme function	What it provides	Exam distinction
Provident fund	Individual retirement savings with credited interest	A balance-based fund is not the same as a pension
Pension	Periodic pension subject to membership/service conditions	Pension formula and eligibility come from the scheme
Deposit-linked insurance	Death-linked assurance under the scheme	An insurance benefit is not the member’s PF balance

The Central Board administers the EPF framework. Do not confuse the employee contribution, employer contribution, the portion allocated to pension, insurance charges and administrative charges. Use the current scheme and notifications for exact rates and allocation.

2026 ceiling update: official government releases record enhancement of the EPFO mandatory-coverage wage ceiling from ₹15,000 to ₹25,000 per month effective 17 September 2026. A pre-September question can still require the earlier figure. The coverage ceiling must not be assumed to change every pension-financing or benefit ceiling automatically.

Calculation with explicit assumptions: if the question stipulates contributory wages ₹25,000 and a 12% employee rate, employee contribution is ₹3,000. The employer’s total at the same stipulated rate is ₹3,000; allocation among scheme components requires the separate EPS/EDLI conditions. The Code’s general contribution framework and notified rate categories must be distinguished.

ESI: insurance rather than a savings account

ESIC administers insurance protection, including medical, sickness, maternity, disablement, dependants’ and other specified benefits. Contribution eligibility and benefit eligibility operate on different conditions and periods. Establishment coverage does not mean that every benefit is payable immediately on the first day of membership.

For an employment-injury question, identify the accident, its connection with employment, whether the person is insured and the applicable benefit. ESI injury benefits and the compensation chapter are not normally cumulative routes to recover twice for the same injury. For a rate question, use the current notified ESI rate and wage ceiling, not the EPFO wage ceiling.

Rule 19 of the Social Security (Central) Rules, 2026 specifies employer contribution of 3.25% and employee contribution of 0.75%, each rounded to the next higher rupee, subject to applicable relief provisions. For stipulated contributory wages of ₹20,000, the amounts are ₹650 and ₹150 respectively. For wages of ₹8,600, employer ₹279.50 rounds to ₹280 and employee ₹64.50 rounds to ₹65. Establishment coverage, individual wage eligibility and benefit qualification remain separate tests.

Gratuity: entitlement, service and calculation

The ordinary rule for a regular employee is five years of continuous service and a qualifying termination event. Death and disablement are key exceptions to that five-year rule. Expiry of fixed-term employment has special treatment and proportionate payment. Rule 33(1)(a) of the Social Security (Central) Rules, 2026 expressly requires service under the contract for at least one year; the IR Code’s fixed-term definition also refers to one year. Apply the current rules rather than assuming every very short contract qualifies.

For a monthly-rated employee, the standard formula is last-drawn qualifying monthly wages × 15/26 × completed years, including a part exceeding six months. A part of exactly six months is not “exceeding six months”. Seasonal and piece-rated work have specific rules; the payment ceiling is separately notified.

Example: qualifying monthly wages ₹26,000 and seven years eight months of service give eight counted years: ₹26,000 × 15/26 × 8 = ₹1,20,000, before applying any relevant ceiling. At seven years exactly six months, the same formula uses seven years, not eight.

Distinguish eligibility, amount, forfeiture and recovery. Forfeiture for loss is linked to the damage in the specified situation; termination alone does not automatically erase the entire gratuity entitlement.

Maternity benefit: conditions before the headline figure

• Ordinary eligibility includes at least 80 days’ work in the preceding 12 months, subject to the statutory counting rules.
• Where the woman has fewer than two surviving children, the maximum is 26 weeks; with two or more surviving children it is 12 weeks. The prenatal portions differ.
• An eligible mother adopting a child below three months and an eligible commissioning mother receive 12 weeks from handover.
• The prohibition on work immediately after delivery, miscarriage or medical termination is six weeks. Other leave entitlements have distinct conditions.
• A crèche is required at establishments with 50 or more employees under this chapter, with prescribed arrangements and visits.
• Nursing breaks and protection against adverse treatment must be studied separately. Work from home depends on the nature of work and mutual agreement.

Employees’ compensation: a problem-solving framework

Ask whether the accident arose out of and in the course of employment, or whether a listed occupational disease is attributable to the work. Identify death, permanent total disablement, permanent partial disablement or temporary disablement. Apply the relevant wage base, age-related factor, statutory minimum and current notification; do not use one formula for every injury.

For the basic formula, death compensation uses 50% of monthly wages × relevant factor, while permanent total disablement uses 60% × relevant factor, subject to statutory minima and applicable wage limits. Scheduled partial disablement uses the specified loss-of-earning-capacity percentage. The appropriate authority, not a private agreement alone, controls several payment and distribution issues.

BOCW cess, gig workers and unorganised workers

BOCW welfare finance is dealt with here, while construction safety is dealt with under the OSH Code. The Code provides a cess rate within 1–2% of prescribed construction cost; the actual applicable rate and excluded cost components require the notification. Worker registration and welfare-board conditions determine benefit access.

For gig and platform workers, the Code enables notified social-security schemes. Registration is an entry point; it is not by itself a promise of a pension or every EPF/ESI benefit. The aggregator contribution framework is 1–2% of annual turnover at the notified rate, capped at 5% of the amount paid/payable to gig and platform workers; the statutory turnover exclusions also matter.

Cap example: assume eligible turnover ₹100 crore, a stipulated 2% rate and worker payouts ₹20 crore. The turnover calculation is ₹2 crore, but 5% of payouts is ₹1 crore. The contribution is limited to ₹1 crore under those assumptions. Do not treat 2% as automatically notified for every aggregator.

Administration, recovery and common traps

• Central Board relates to provident fund; ESIC relates to State Insurance; national/state boards and construction welfare boards have different functions.
• Inspection, determination of dues, interest, damages, prosecution, compounding and appeal are distinct processes.
• A wage ceiling can be changed by notification; the number printed in an old textbook may no longer answer a current question.
• Career-centre vacancy reporting does not compel the employer to recruit only through that centre.
• Repeal-and-savings provisions preserve specified past actions, liabilities and compatible instruments; “repealed” does not mean every old event loses legal effect.

30 Social Security Code practice questions

Attempt each question before opening the answer. These are CrackTarget practice questions.

Q1. The Code on Social Security, 2020 is:

• A. Act No. 29 of 2019
• B. Act No. 36 of 2020
• C. Act No. 40 of 2020
• D. Act No. 8 of 2019

Answer and explanation

B. It is Act No. 36 of 2020. Presidential assent: 28 September 2020.

Q2. How many Central Acts does the Code subsume under Section 164?

• A. Four
• B. Six
• C. Nine
• D. Thirteen

Answer and explanation

C. Nine Acts, including EPF 1952, ESI 1948, Maternity Benefit 1961, Gratuity 1972 and the 1959 Employment Exchanges Act.

Q3. Which of the following was NOT repealed by the Code on Social Security, 2020?

• A. Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959
• B. Cine-Workers Welfare Fund Act, 1981
• C. Trade Unions Act, 1926
• D. Unorganised Workers’ Social Security Act, 2008

Answer and explanation

C. Trade Unions Act, 1926 is subsumed in the Industrial Relations Code, 2020, not the Social Security Code.

Q4. Employees’ Provident Fund provisions under Chapter III generally apply to establishments employing:

• A. 10 or more employees
• B. 20 or more employees
• C. 50 or more employees
• D. 100 or more employees

Answer and explanation

B. First Schedule: PF chapter trigger is 20 or more employees, subject to notification and voluntary coverage.

Q5. ESI provisions under Chapter IV generally apply to establishments employing:

• A. 5 or more employees
• B. 10 or more employees
• C. 20 or more employees
• D. Only factories notified by the State

Answer and explanation

B. ESI threshold is 10 or more. Hazardous occupations may be covered even with one worker.

Q6. Under the Code, a “gig worker” is a person who:

• A. Is always an apprentice under the 1961 Act
• B. Works only inside a factory canteen
• C. Earns from work outside a traditional employer–employee relationship
• D. Must be on the regular muster-roll of an aggregator

Answer and explanation

C. Section 2 defines a gig worker as someone performing work and earning outside the traditional employer–employee relationship.

Q7. An “aggregator” under the Code is:

• A. Any trade union federation
• B. A digital intermediary or marketplace connecting users with service providers
• C. Only a Government e-marketplace
• D. A State Welfare Board

Answer and explanation

B. Aggregator = digital intermediary / marketplace. Seventh Schedule lists ride-sharing, delivery, logistics, e-marketplace, etc.

Q8. If payments excluded from “wages” exceed what share of all remuneration, the excess is treated as wages?

• A. 25%
• B. 33%
• C. 40%
• D. 50%

Answer and explanation

D. The 50% rule is the common wages definition across the labour codes.

Q9. Paid maternity benefit for the first two children under Chapter VI is:

• A. 12 weeks
• B. 16 weeks
• C. 26 weeks
• D. 52 weeks

Answer and explanation

C. Section 60 allows up to 26 weeks where a woman has fewer than two surviving children, subject to eligibility. A woman with two or more surviving children has a 12-week maximum.

Q10. Maternity benefit for an adopting mother or commissioning mother is:

• A. 6 weeks
• B. 12 weeks
• C. 26 weeks
• D. Not provided in the Code

Answer and explanation

B. Section 60 gives 12 weeks from handover to an eligible commissioning mother or a mother legally adopting a child below three months.

Q11. Minimum days of work required in the preceding 12 months to claim maternity benefit:

• A. 30 days
• B. 70 days
• C. 80 days
• D. 160 days

Answer and explanation

C. 80 days — carried forward from the Maternity Benefit Act, 1961.

Q12. A crèche facility is required where the establishment employs at least:

• A. 10 employees
• B. 30 employees
• C. 50 employees
• D. 100 employees

Answer and explanation

C. 50 or more employees.

Q13. Work is prohibited for how many weeks immediately after delivery?

• A. 2 weeks
• B. 4 weeks
• C. 6 weeks
• D. 12 weeks

Answer and explanation

C. Six weeks after delivery, miscarriage or medical termination of pregnancy.

Q14. For a regular employee, gratuity under Chapter V ordinarily requires continuous service of:

• A. 1 year
• B. 3 years
• C. 5 years
• D. 10 years

Answer and explanation

C. Five years remains the rule for regular employees.

Q15. The distinctive gratuity rule for fixed-term employees in the Code is that:

• A. They are excluded from gratuity
• B. They get gratuity only after 10 years
• C. Gratuity is paid pro-rata without the 5-year condition
• D. Only the State Government may grant it

Answer and explanation

C. Section 53 removes the ordinary five-year condition on expiry of fixed-term employment and provides proportionate payment. Read the applicable rules and the IR Code’s one-year condition for fixed-term gratuity; do not assume every one-day engagement necessarily earns a payout.

Q16. Standard gratuity calculation uses which daily-wage divisor?

• A. 30
• B. 26
• C. 15
• D. 365

Answer and explanation

B. (Monthly wages ÷ 26) × 15 × completed years of service.

Q17. Cess on building or other construction work under Chapter VIII is:

• A. 0.5% of land value
• B. 1–2% of construction cost excluding land and compensation
• C. 5% of contractor profit
• D. A flat ₹10 lakh per project

Answer and explanation

B. 1% to 2% of the cost of construction, excluding cost of land and compensation.

Q18. Aggregator contribution to the social security fund is:

• A. 0.5% of GST only
• B. 1–2% of annual turnover, capped at 5% of amounts paid to gig/platform workers
• C. 5–10% of net profit
• D. Equal to the employee PF share

Answer and explanation

B. Section 114 read with the Seventh Schedule: 1–2% of turnover, cap of 5% of payouts to such workers.

Q19. Which schedule classifies aggregators?

• A. First Schedule
• B. Third Schedule
• C. Fifth Schedule
• D. Seventh Schedule

Answer and explanation

D. Seventh Schedule — ride-sharing, food/grocery delivery, logistics, e-marketplace, professional services, healthcare, travel & hospitality, content & media, residual.

Q20. Occupational diseases are listed in which schedule?

• A. First
• B. Second
• C. Third
• D. Seventh

Answer and explanation

C. Third Schedule lists occupational diseases. Second Schedule lists persons treated as employees for compensation.

Q21. The National Social Security Board is constituted primarily to:

• A. Hear PF appeals as a tribunal
• B. Recommend and monitor schemes for unorganised, gig and platform workers
• C. Replace the ESI Corporation
• D. Collect income tax on PF

Answer and explanation

B. Section 6: National Board plus State Unorganised Workers’ Boards.

Q22. Which statement about “employee” under the Code is correct?

• A. It always includes apprentices engaged under the Apprentices Act, 1961
• B. Armed Forces members are included
• C. A person employed through a contractor can be an employee
• D. Managerial staff are excluded from the definition in every chapter

Answer and explanation

C. Employee includes persons employed directly or through a contractor. Apprentices under the 1961 Act and Armed Forces members are excluded.

Q23. Employee’s Compensation (Chapter VII) generally applies:

• A. In addition to ESI in every factory
• B. Where Chapter IV (ESI) does not apply
• C. Only to Central Government servants
• D. Only to gig workers

Answer and explanation

B. First check the First Schedule and ESI benefit-bar provisions. Chapter VII supplies compensation for specified employment injuries under its scope; the same injury is not automatically compensable under both ESI and employee-compensation regimes.

Q24. For death as a result of injury, compensation is computed as:

• A. 100% of monthly wages × factor
• B. 50% of monthly wages × relevant factor
• C. 15 days’ wages per year of service
• D. A uniform ₹10 lakh

Answer and explanation

B. Death: 50% of monthly wages × factor. Permanent total disablement: 60% × factor.

Q25. Career centres and compulsory notification of vacancies appear in:

• A. Chapter II
• B. Chapter V
• C. Chapter IX
• D. Chapter XIII

Answer and explanation

D. Chapter XIII absorbs the Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959.

Q26. A commonly tested pre-deposit when an employer appeals a determined PF amount under the Code is:

• A. 10%
• B. 25%
• C. 50%
• D. 75%

Answer and explanation

B. The Code lowered the appeal deposit culture to 25% of the determined amount.

Q27. Non-payment of contributions can attract imprisonment up to:

• A. 6 months
• B. 1 year
• C. 3 years
• D. 7 years

Answer and explanation

C. Chapter XII: imprisonment up to 3 years and fine for specified contribution defaults; compounding exists for certain offences.

Q28. Which body administers Employees’ State Insurance under the Code?

• A. Central Board of Trustees only
• B. National Social Security Board only
• C. Employees’ State Insurance Corporation
• D. State Building Workers’ Welfare Board

Answer and explanation

C. Section 5 constitutes the ESI Corporation. The Central Board is the PF trustee body.

Q29. As notified in September 2026, the wage ceiling for Chapter III (EPF-linked coverage) is:

• A. ₹15,000 per month
• B. ₹21,000 per month
• C. ₹25,000 per month
• D. No ceiling at all

Answer and explanation

C. Ministry of Labour notified ₹25,000 per month with effect from 17 September 2026, replacing the long-standing ₹15,000 ceiling.

Q30. The Code contains how many chapters?

• A. 9
• B. 12
• C. 14
• D. 16

Answer and explanation

C. 14 chapters and 164 sections, plus seven schedules.

Frequently asked questions

Has the Code been implemented?

The four Labour Codes were made effective from 21 November 2025. Central Rules followed in May 2026. Use the applicable rules and notifications for procedural details.

Is ₹15,000 still the latest EPFO coverage ceiling?

Official government releases record ₹25,000 per month effective 17 September 2026. Date-sensitive past questions can require ₹15,000.

Does every gig worker automatically get EPF and ESI?

No. The Code provides a scheme-based framework. Registration, notified scheme conditions and financing determine the actual benefit.

Sources and further reading

• Code on Social Security, 2020: India Code
• PIB: four Labour Codes effective from 21 November 2025
• Social Security (Central) Rules, 2026: official Gazette PDF
• PIB, 16 September 2026: EPFO wage-ceiling decision
• PIB, 23 September 2026: wage ceiling effective 17 September 2026
• EPFO official website: organisation, schemes and circulars

Continue your APFC preparation

• Industrial Relations Code, 2020: Detailed Notes & Practice Questions
• Code on Wages, 2019: Complete APFC Notes & High-Yield Points
• OSH & Working Conditions Code, 2020: Essential Notes for APFC
• Labour Codes vs Old Acts: Comprehensive Comparison Tables
• 500 One-Liners on Labour Codes & Social Security for EPFO APFC
• Current Affairs for APFC 2026: Labour Ministry, EPFO Updates & Schemes