Section 90: Power of Government to Exempt Establishments

Overview

Section 90 of the Code on Social Security, 2020, deals with the overarching framework of social security benefits covered under the Code – including Provident Fund, Employees’ State Insurance (ESI), gratuity, maternity benefits, and other welfare schemes. It doesn’t focus on a *specific* benefit, but rather provides flexibility to the government to recognize establishments already providing robust social security provisions to their employees, potentially exceeding statutory requirements. This section allows the government to exempt such entities from certain provisions of the Code.

Who is Covered?

• Classes of employees and establishments covered: This section applies to any establishment, class of employees, or entire industry. The ‘appropriate government’ (Central, State, or Union Territory) has the discretion to decide who qualifies for exemption.
• Any eligibility conditions such as length of service or wage limits: There are no explicitly defined eligibility conditions *within Section 90 itself*. The conditions for exemption will be determined by the government when issuing exemption notifications. These conditions could relate to the nature of the benefits provided, the financial stability of the establishment, or the number of employees covered.

Benefits and Contributions

• What benefit the employee gets: Employees in exempted establishments continue to receive the social security benefits they are already entitled to, which are deemed ‘superior or comparable’ to those mandated by the Code. The exemption doesn’t diminish existing benefits.
• Contribution responsibilities of employer, employee and government: If an establishment is exempted from specific provisions, it may not be required to contribute to statutory schemes like the ESI or Provident Fund in the same manner as other establishments. However, the exempted establishment *must* continue to provide social security benefits at a level equivalent to or better than the statutory requirements. The specific contribution structure will depend on the terms of the exemption granted.

Procedure and Compliance

The procedure for obtaining an exemption is not detailed within Section 90 itself. It is expected that the appropriate government will establish a process for applications, review, and approval. Generally, the process would likely involve:

1. Application: The establishment submits a detailed application to the appropriate government, outlining the social security benefits provided to its employees.
2. Verification: The government verifies the information provided and assesses whether the benefits are indeed superior or comparable to those mandated by the Code.
3. Notification: If approved, the government issues a notification exempting the establishment from specific provisions of the Code.
4. Ongoing Compliance: The exempted establishment must continue to meet the conditions upon which the exemption was granted and may be subject to periodic audits.

Practical Examples

• Example 1: A large multinational corporation provides its employees with a comprehensive health insurance plan, a generous pension scheme, and substantial gratuity benefits – all exceeding the statutory requirements under the Code. The company applies for and receives an exemption from contributing to the ESI scheme, as its existing health insurance provides superior coverage.
• Example 2: An establishment is granted an exemption from certain Provident Fund provisions. However, it fails to maintain the level of pension benefits promised to its employees. The government can revoke the exemption and require the establishment to comply fully with the Code.

Disclaimer

This article is for basic understanding of social security law and should not be treated as legal advice. For specific legal guidance, please consult with a qualified advocate.