Background

It is now nearly 2 years since the Code on Social Security, 2020 was enacted. We await a notification announcing the date when it shall come into force. Many companies have been asking what others are doing about preparing for the implementation of the Code. To capture these thoughts, we had launched a simple pulse survey, the results of which can be seen further.

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Survey Participants

The survey was sent to KAP clients, and the participation recorded is as under:

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How much did they know about the Code on Social Security?

➢ As seen the bulk of respondents are aware and also working towards getting prepared to embrace the Code.

➢ The salary restructuring and financial implications could be more material for some than others. Hence, it is recommended to undertake an impact analysis and educate employees about the change.

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Action and Impact

➢ Commensurate to the awareness and preparedness, 45% of the respondents are assessing impact the Code will have when enforced.

➢ However, there are some divided opinions about the impact the Code will have. This could be due to varied salary structures and benefits offered by different companies to its employees.

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➢ The total liability towards Gratuity of the participating companies was more than INR 7,100 crores.

➢ Code on Social Security is around the corner and will replace the Payment of Gratuity Act. However as most of the Payment of Gratuity Act has been transposed directly, majority of the survey takers felt that it is important and relevant.

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