Social Security Code 2020 FAQs: 8 Major Acts Repealed From Nov 21, 2025; What Happens To PF, ESI & Gratuity?

The Code changes how provident fund (PF), ESI, gratuity, maternity benefits, employee compensation, and welfare programs for unorganized, gig, and platform workers function in India. It was created to streamline compliance and broaden coverage. Employers, HR specialists, startups, aggregators, and employees can read the Code on Social Security, 2020 - Practical FAQs here compiled by Pratik Vaidya, Chief Vision Officer and Managing Director of Karma Management Global Consulting Solutions Pvt. Ltd., in order to get a clear understanding of what has changed, what remains under savings clauses, and how the new regulations affect payroll, contributions, and long-term benefits. These provisions went into effect on November 21, 2025.

Q1. What is the Code on Social Security, 2020 trying to do in simple terms?

The Code on Social Security, 2020 (CoSS) brings together nine different socialsecurity laws into one common framework. These older laws covered things like: compensation for workplace injury, PF, ESI, gratuity, maternity benefit, BOCW cess, and welfare of unorganized workers.

The objectives are to:

• Harmonies key definitions (especially "wages").
• Run multiple schemes under one umbrella Code.
• Recognize unorganized, gig and platform work.
• Enable digital, portable, scheme-based social security (Aadhaar, bank account, e-Shram, etc.).

Think of it as moving from a cupboard of nine different Acts to one organized wardrobe with separate sections inside.

Q2. Which earlier Acts are now repealed under CoSS?

The Schedule to CoSS lists nine laws for repeal. A 21 November 2025 notification has actually repealed eight of them, with savings:

1. Employees' Compensation Act, 1923
2. Employees' State Insurance Act, 1948
3. Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959
4. Maternity Benefit Act, 1961
5. Payment of Gratuity Act, 1972
6. Cine Workers Welfare Fund Act, 1981
7. BOCW Welfare Cess Act, 1996
8. Unorganized Workers' Social Security Act, 2008

Important:

These Acts are repealed from 21.11.2025, subject to the savings clause in Section 164(2). Their subject-matter now sits in different chapters of CoSS (PF, ESI, gratuity, etc.).

Q3. What about the EPF & MP Act, 1952? Has it been repealed?

No. That is where a lot of confusion in the market arises.

The EPF & MP Act, 1952 (Item 3) is not repealed by the 21.11.2025 notification. As of 21.11.2025, the notification repeals Items 1, 2 and 4-9 only. EPF stays in place.

Practically:

• The EPF Act and its schemes (EPF, EPS, EDLI) continue to operate. Some provisions of CoSS dealing with PF have been brought into force, so PF is now read together with CoSS and its savings clause. Any blanket statement that "PF Act has been repealed" is not accurate as of 21.11.2025.

Q4. What does "repeal and savings" really mean here?

Section 164 of CoSS has two parts:

Sub-section (1) - lists the Acts to be repealed.
Sub-sections (2) - (3) - the savings clause.

The savings clause preserves:

• Existing schemes: EPF, EPS, EDLI, ESI rules, gratuity rules, etc.
• Existing rules, notifications, licences, registrations, actions and proceedings, as long as they are not inconsistent with CoSS.

In everyday language: The "nameplate" of the law changes, but existing schemes and rights do not vanish overnight. They are deemed to continue under CoSS until replaced.

Q5. What is the unified "wages" definition in Coss?

CoSS uses one common definition of "wages", aligned with the Wage Code: Included (core):

• Basic pay
• Dearness allowance
• Retaining allowance (if any) Excluded (illustrative):
• Statutory bonus / production incentive
• House Rent Allowance (HRA)
• Overtime allowance
• Commission
• Employer's PF / pension contribution
• Gratuity and similar terminal benefits
• Certain other allowances and perquisites as notified

This wage concept is meant to be a common base for many benefits - ESI, gratuity, maternity, EC, BOCW welfare, unorganized and gig worker schemes - subject to individual scheme rules.

Q6. What is the 50% ceiling rule on exclusions?

Can you give a simple example? CoSS introduces a 50% cap on excluded components.

Rule: If the total of all excluded components (HRA, special allowance, incentives, etc.) is more than 50% of total remuneration, the excess over 50% has to be added back to wages.

Example

Total monthly remuneration: Rs 60,000
Basic + DA + RA (core wages): Rs 20,000

Exclusions:

HRA: Rs 20,000
Special allowance: Rs 18,000
Conveyance: Rs 2,000
Total exclusions: Rs 40,000
50% of 60,000 = Rs 30,000.
Exclusions = 40,000 → Rs 10,000 higher than 50%.

So, for CoSS purposes: Wages = 20,000 (core) + 10,000 (excess exclusions) = Rs 30,000. This logic is important wherever CoSS wages are used (ESI, gratuity, EC, etc.).

Q7. Does this 50% rule automatically change PF wages today?

As of 21.11.2025:

• PF contributions still follow the EPF & MP Act and EPF Scheme logic for "basic wages" and contribution wages.
• There is no general notification that has replaced PF wages with the CoSS 50% wages formula.

Practical position for now:

• For PF / EPS / EDLI - continue applying existing PF wage rules unless EPFO specifically amends them.
• For ESI, gratuity, EC, etc. - align to CoSS wages + 50% rule as and when those chapters and schemes are notified and applicable.

Q8. What is the status of PF, EPS and EDLI under CoSS?

As of 21.11.2025:

• EPF & MP Act, 1952 continues (not repealed by the 21.11.2025 notification). The EPF Scheme 1952, EPS 1995 and EDLI 1976 continue as schemes.
• These schemes are now deemed to operate within the CoSS framework through Section 164's savings, until replaced or amended.

For an employee or employer, it means: PF account numbers, passbooks, contribution rates, administrative setup - continue as before, subject to any specific circulars from EPFO.

Q9. Do past PF rights and cases get affected by CoSS?

No, CoSS includes a strong savings provision.

Past contributions, accumulations, interest, pensionable service are preserved. Ongoing enquiries, inspections, court cases continue and are treated as if they are under the corresponding CoSS provisions, where applicable.

In effect, PF history is carried forward; CoSS does not wipe the slate clean.

Q10. Has the ESI Act, 1948 been repealed? Is ESI itself gone?

The ESI Act, 1948 is one of the eight Acts formally repealed from 21.11.2025, subject to savings.

However, the ESI system continues under Chapter IV of CoSS, with ESIC as the implementing body.

So, the label changes from "ESI Act, 1948" to "ESI under CoSS", but:

• Insured persons continue to access ESI hospitals and benefits.
• Employers continue to pay ESI contributions and file returns, read now under CoSS and relevant rules.

Q11. What has changed in the definitions of "family" and "dependant" for ESI?

CoSS has broadened these definitions, and ESIC has issued a circular to implement them.
Key additions (illustrative):

• A widower and grandparents can qualify as dependants in certain conditions.
• Mother-in-law and father-in-law of a woman employee may come within "family" / "dependant" where they are wholly or substantially dependent and under the prescribed income cap.

This has a direct impact on:

• Dependent benefit eligibility after an insured person's death.
• Medical benefits for extended family members.

Many media pieces have highlighted that this expanded "family" definition can significantly widen social security coverage for Indian households.

Q12. How does CoSS change the gratuity framework?

Under CoSS, gratuity is covered in Chapter V and the earlier Payment of Gratuity Act has been repealed (with savings).

Key features:

• The basic formula remains: 15 days' wages for each completed year ofservice, with service of more than 6 months rounded up.
• Gratuity is now calculated on CoSS "wages" (with the 50% rule), subject to ceilings.
• Fixed Term Employees (FTEs) become eligible for pro-rata gratuity after 1 year of continuous service.

Q13. Does the 1-year gratuity rule apply to all employees now?

No. The relaxation is specifically provided for Fixed Term Employment.

The general rule of 5 years' continuous service for a regular employee continues, except in cases of death or disablement.

For fixed term employees, CoSS allows gratuity after 1 year of continuous service, on a pro-rata basis.

Example: A software engineer is hired on a 18-month fixed term contract at Rs 40,000 Coss wages per month. After 18 months, the contract is not renewed. Under CoSS, she has completed more than 1 year of continuous fixed term service, so she becomes eligible for gratuity calculated on a pro-rata basis. Some headlines loosely say "gratuity after one year", but the fine print ties this to fixed term arrangements.

Q14. What happens to maternity benefit under CoSS?

The Maternity Benefit Act, 1961 is repealed and absorbed into Chapter VI of CoSS, with continuity of benefits.

Key points remain:

• Up to 26 weeks' paid maternity leave where there are 2 or fewer surviving children; 12 weeks otherwise.
• Protection from dismissal on grounds of pregnancy.
• Coverage of adoptive and commissioning mothers as per notified provisions.

Where a woman is covered under ESI, the maternity benefit may come through the ESI scheme; otherwise, Chapter VI of CoSS applies directly.

Q15. How is Employees' Compensation aligned with ESI now?

Employees' Compensation (earlier Employees' Compensation Act, 1923) is now in Chapter VII of CoSS.

The basic idea:

• Where a worker is covered by ESI and employment injury benefits are available, EC does not apply for the same contingency, to avoid double benefits.
• Where ESI is not applicable (e.g., very small units, certain categories), EC under CoSS applies for workplace death or disablement.

Q16. How does Coss deal with unorganized workers now?

Under Chapter IX, CoSS:

• Repeals the Unorganised Workers' Social Security Act, 2008 (with savings). Integrates the concept of the unorganised worker into a broader framework along with gig and platform workers.
• Provides for national registration/database (e.g., e-Shram) with Aadhaar linkage and bank account details.

Benefits are delivered via:

• Central and state social security schemes for life, disability, health, maternity, old age, education, housing, etc.
• Cess-funded mechanisms such as BOCW boards.

PF/ESI-type employer contributions are generally not imposed in the same way on unorganised work; the approach is more scheme and fund based.

Q17. What is new for gig and platform workers and aggregators?

CoSS is the first central law to explicitly define gig workers, platform workers and aggregators, and to create a dedicated social security mechanism for them.

Key elements:

• A Social Security Fund for gig and platform workers.
• Aggregator contributions:
• A notified percentage (typically between 1% and 2%) of annual turnover; Capped at a percentage of total payouts to workers (e.g., 5%).
• Contributions are a statutory liability of the aggregator, not a deduction from workers' earnings.
• Schemes funded from this pool can provide healthcare, accident cover, life cover, maternity support, old-age assistance, etc.

Example: Aggregator turnover: Rs 200 crore, total payouts to gig workers: Rs 60 crore Notified rate: 1% of turnover; cap: 5% of payouts 1% of 200 crore = Rs 2 crore; 5% of 60 crore = Rs 3 crore Contribution = Rs 2 crore (lower of the two limits).

Recent media coverage shows a clear pattern: workers' unions welcome legal recognition and a welfare fund, but continue to push for stronger protections on wages, working hours, safety and algorithmic fairness, including coverage under other Codes and state laws.

Q18. What is the position of BOCW welfare under CoSS?

Under the new regime:

• The BOCW Regulation Act (conditions of service,safety, etc.) is largely absorbed into the OSHWC Code.
• The BOCW Welfare Cess Act, 1996 stands repealed from 21.11.2025 and is folded into Chapter VIII of CoSS.

Chapter VIII covers:

• Levy and collection of cess on construction cost.
• Creation and functioning of Welfare Boards.
• Use of cess for welfare schemes for registered construction workers.
• For builders and contractors:
• Cess obligations and welfare board compliance continue, but under the CoSS label.

Q19. What records and systems does CoSS expect employers to maintain?

CoSS expects employers and responsible entities to maintain, preferably in an integrated and digital form:

• Registers of employees and workers (permanent, FTC, contract, apprentices). Wage and attendance record consistent with the unified wage concept.
• Records of PF / ESI and other social security contributions, challans, returns. Gratuity accruals and payments, including insurance/fund details.
• Accident and injury records for EC and ESI.
• Data relating to unorganized, gig/platform and BOCW workers where relevant. Inspections under CoSS are intended to shift more towards

Inspector-cum-Facilitator and riskbased, IT-driven approaches rather than purely manual, surprise inspections.

Q20. Is there a time limit for authorities to raise social security dues under CoSS?

CoSS introduces an outer limitation period (generally five years) for determination and recovery of dues from employers, except where a longer period is provided or where there is fraud, willful misrepresentation or suppression of material facts.

For employers, this has two practical implications:

• Record-keeping policies should ensure that wage and contribution data is preserved for at least five years, and often longer to align with tax and company law.
• Very old periods should not see fresh demands unless there is a serious misconduct angle.

Q21. How should organizations handle "mixed period" cases around 21.11.2025?

For periods before the relevant CoSS provisions came into force:

• Rights and liabilities are governed by the earlier Acts, preserved via savings.

For periods after commencement:

• CoSS chapters and schemes apply, read with savings and notifications.

Many real cases willstraddle both sides (e.g., gratuity for service starting in 2018 and ending in 2028). In such situations, a common practical approach is: Compute the entitlement in a manner that respects both old law and new Code, and does not deprive the worker of accrued benefits.

Watch for clarificatory rules / circulars that may lay down more specific formulas.

Q22. What are the top 5 practical steps employers should take under CoSS now?

1. Map your coverage

For each benefit (PF, ESI, gratuity, maternity, EC, BOCW, gig/unorganized), identify:

• Which chapter of CoSS applies;
• From what date;
• Which legacy schemes/rules continue.

2. Align wage definitions

• Ensure payroll, HRIS and policies reflect CoSS wages + 50% rule wherever applicable (ESI, gratuity, EC, etc.), while retaining existing PF wage logic until substituted.

3. Review gratuity and FTC policies

• Incorporate gratuity for fixed term employees after 1 year into HR policy and systems.
• Check gratuity trust or insurance arrangements for alignment with CoSS wages.

4. Update documentation and contracts

• Offer letters, appointment letters, FT contracts, vendor contracts, exit letters, FnF formats, and handbooks should shift to Coss terminology (wages, dependents, family, gig/platform worker references where relevant).

5. Strengthen data and inspection readiness

• Move away from scattered spreadsheets to clean, centralized records.
• Ensure PF, ESI, gratuity, BOCW and gig/unorganized worker data can be produced quickly for any Inspector-cum-Facilitator or authority under the Code.