Quiz: Code on Social Security 2020 — 27 questions

1. What is the primary legislative purpose of the Code on Social Security, 2020?

A. To preserve separate social-security statutes for each employment sector

B. To amend and consolidate social-security laws while extending benefits across sectors

C. To regulate workplace safety without changing existing social-security laws

D. To provide retirement benefits to organised-sector employees through one statute

Answer: (B)

Explanation

The Code was enacted to amend and consolidate social-security laws and extend benefits to organised, unorganised, and other sectors. It therefore goes beyond preserving separate sector-specific statutes.

2. On what date did the Code on Social Security, 2020 come into force?

A. 22 September 2020

B. 23 September 2020

C. 1 January 2021

D. 21 November 2025

Answer: (D)

Explanation

The Code came into force on 21 November 2025. The September 2020 dates refer to its passage by the two houses of Parliament, not its commencement.

3. Which combination best describes the objectives of the Code on Social Security, 2020?

A. Consolidating laws, universalising protection, and recognising new forms of employment

B. Replacing social insurance, removing compliance duties, and restricting benefits to employees

C. Reducing benefits, excluding informal workers, and expanding employer-specific regulations

D. Separating laws by sector, limiting coverage, and preserving traditional employment categories

Answer: (A)

Explanation

The Code aims to consolidate laws, universalise social security, include diverse workers, recognise new employment forms, provide comprehensive benefits, and rationalise compliance. The other combinations contradict its broad and inclusive objectives.

4. Which statement accurately describes the laws subsumed by the Code on Social Security, 2020?

A. It replaces employment legislation with a framework limited to retirement and medical benefits

B. It incorporates several labour laws but excludes legislation concerning maternity and unorganised workers

C. It subsumes nine enactments, including laws on compensation, insurance, provident funds, maternity, gratuity, and unorganised workers

D. It combines two enactments focused on provident funds and employee insurance

Answer: (C)

Explanation

The Code subsumes nine enactments, including the listed laws on compensation, insurance, provident funds, maternity, gratuity, and unorganised workers. Its scope is therefore broader than provident-fund and insurance statutes alone.

5. Which items are included in wages under Section 2(88) of the Code on Social Security, 2020?

A. Basic pay, dearness allowance, and retaining allowance

B. Bonus, house rent allowance, and overtime payment

C. Overtime payment, bonus, and retaining allowance

D. Commission, conveyance allowance, and house rent allowance

Answer: (A)

Explanation

Wages include monetary remuneration such as basic pay, dearness allowance, and retaining allowance. Bonus, HRA, overtime, commission, and conveyance allowance are among the specified excluded items.

6. An employee receives remuneration containing excluded components equal to 60% of total remuneration and 10% of remuneration in kind. How is the wage amount determined under the Code?

A. The excess above 50% is ignored, and the full in-kind remuneration is treated separately

B. The excess above 50% is added back, and the 10% in-kind remuneration is included

C. The entire excluded component is removed, and the in-kind remuneration is excluded

D. The excluded component is added back up to 50%, and the in-kind remuneration is excluded

Answer: (B)

Explanation

Excluded components exceeding 50% of total remuneration are added back to wages, while remuneration in kind can be included up to 15%; therefore, the 10% in-kind amount qualifies. The 50% threshold applies to the excess, not to the whole excluded component.

7. When does ordinary mandatory provident-fund coverage generally begin for an establishment?

A. When it employs 10 or more employees

B. When it employs 20 or more employees

C. When it employs 50 or more employees

D. When it employs 25 or more employees

Answer: (B)

Explanation

Provident-fund provisions generally apply once an establishment employs at least 20 employees, although the Central Government may extend coverage by notification. The 10-employee threshold belongs to Employee State Insurance rather than ordinary provident-fund coverage.

8. If the employer’s statutory provident-fund contribution is calculated at 10% of wages, what amount does the employee generally contribute?

A. An amount equal to 3.25% of the employee’s wages

B. An amount equal to 12% of the employee’s wages

C. An amount equal to half the employer’s contribution

D. An amount equal to the employer’s statutory contribution

Answer: (D)

Explanation

The employee contributes an amount equal to the employer’s statutory contribution, which is generally 10% of wages in this situation. The 12% figure is a possible enhanced employer rate, while 3.25% is the ESI employer contribution.

9. Which situation allows gratuity to become payable without completing five years of continuous service?

A. The employee’s transfer to another establishment

B. The employee’s resignation after two years

C. The employee’s voluntary reduction of working hours

D. The employee’s death during service

Answer: (D)

Explanation

Gratuity may become payable without five years of service in cases such as death, disablement, and expiry of a fixed-term contract. Ordinary resignation generally requires at least five years of continuous service.

10. A monthly-rated employee has last drawn monthly wages of Rs.26,000 and 10 completed years of service. Which expression calculates the gratuity?

A. $26{,}000 \times \frac{10}{26} \times 15$

B. $26{,}000 \times \frac{15}{26} \times 10$

C. $26{,}000 \times \frac{15}{30} \times 10$

D. $26{,}000 \times 10 \times 26 \times 15$

Answer: (B)

Explanation

For a monthly-rated employee, gratuity is based on last drawn monthly wages multiplied by $\frac{15}{26}$ and the years of service. The calculation uses current last drawn wages rather than total lifetime earnings or a different denominator.

11. How is gratuity calculated for a fixed-term employee under the stated proportional method?

A. Using average monthly wages, $\frac{15}{30}$, and the contract’s full duration

B. Using last drawn wages, $\frac{15}{26}$, and completed service without rounding beyond six months

C. Using total lifetime earnings, $\frac{15}{26}$, and the employee’s age

D. Using last drawn wages, $\frac{30}{26}$, and rounded service years

Answer: (B)

Explanation

A fixed-term employee’s gratuity uses last drawn monthly wages, $\frac{15}{26}$, and completed service proportionally, without rounding service beyond six months up to a full year. The method does not substitute lifetime earnings, average wages, or the full contractual duration.

12. Which employee falls within the ordinary ESI wage ceiling when working in an establishment employing at least 10 persons?

A. An employee earning Rs.26,000 per month

B. An employee earning Rs.21,000 per month

C. An employee earning Rs.22,500 per month

D. An employee earning Rs.24,000 per month

Answer: (B)

Explanation

The ordinary ESI wage ceiling is Rs.21,000 per month for employees in establishments employing at least 10 persons. A ceiling of Rs.25,000 applies to persons with disabilities, not as the ordinary ceiling for all employees.

13. What are the standard ESI contribution rates for the employer and employee, respectively?

A. 3.25% for the employer and 0.75% for the employee

B. 10% for the employer and 10% for the employee

C. 3.25% for both the employer and employee

D. 0.75% for the employer and 3.25% for the employee

Answer: (A)

Explanation

The employer contributes 3.25% of wages, while the employee contributes 0.75% of wages. The contribution burden is therefore higher for the employer, unlike the equal contribution structure described for provident funds.

14. Which benefit is included among the benefits provided under ESI?

A. Vocational-rehabilitation benefit

B. Provident-fund withdrawal benefit

C. Annual-profit-sharing benefit

D. Housing-purchase benefit

Answer: (A)

Explanation

ESI benefits include vocational-rehabilitation benefits along with medical, sickness, maternity, disablement, dependants’, funeral, and re-employment benefits. Provident-fund withdrawals and profit sharing belong to different employment-benefit arrangements.

15. Which employee is generally eligible for compensation under the employee compensation regime?

A. An employee who leaves work before reporting an occupational illness

B. An employee absent from work without an employment-related injury

C. An employee injured in an employment-related accident who is not covered by ESI

D. An employee covered by ESI who suffers an unrelated personal injury

Answer: (C)

Explanation

The regime covers employment-related accidents and occupational diseases, but employees covered by ESI are excluded. ESI coverage therefore prevents a claim under this particular compensation regime even when the employee is otherwise within the workplace system.

16. How is compensation for permanent total disablement calculated when monthly wages and the relevant factor are known?

A. $50\% \times \text{monthly wages} \times \text{relevant factor}$

B. $60\% \times \text{monthly wages} \times \text{relevant factor}$

C. $60\% \times \text{annual wages} \times \text{relevant factor}$

D. $50\% \times \text{annual wages} \times \text{relevant factor}$

Answer: (B)

Explanation

Permanent total disablement is calculated using 60% of monthly wages multiplied by the relevant factor. The 50% rate applies to compensation for death, while the formula uses monthly rather than annual wages.

17. What eligibility condition generally applies before a woman can receive maternity benefit?

A. She must have worked for at least 80 days during the preceding 12 months.

B. She must work in an establishment employing at least 50 women.

C. She must have worked for at least six weeks after the date of delivery.

D. She must have two or more surviving children before applying.

Answer: (A)

Explanation

Eligibility generally requires at least 80 days of work in the preceding 12 months in an establishment employing women. The six-week period concerns a restriction on working after certain pregnancy-related events, not the eligibility threshold.

18. What is the ordinary maximum maternity leave available to an eligible woman who does not have two or more surviving children?

A. Up to 20 weeks

B. Up to 12 weeks

C. Up to 26 weeks

D. Up to six weeks

Answer: (C)

Explanation

The ordinary maximum maternity leave is 26 weeks for an eligible woman who does not fall under the two-or-more-surviving-children limitation. The 12-week period applies to women with two or more surviving children and to adoptive or commissioning mothers.

19. Which person fits the definition of an unorganised worker?

A. A self-employed worker in the unorganised sector who lacks formal social-security coverage

B. A company director whose employment contract provides statutory retirement protection

C. A salaried worker in the organised sector who receives comprehensive social-security coverage

D. A platform worker who has completed registration and receives every available benefit

Answer: (A)

Explanation

The definition includes home-based, self-employed, and wage workers in the unorganised sector, as well as organised-sector workers who are not covered by a social-security scheme. Sector classification alone is not decisive, because an organised-sector worker can also qualify when scheme coverage is absent.

20. What must an eligible gig or platform worker generally do to access social-security schemes?

A. Prove membership in an organised-sector retirement scheme before applying

B. Register through self-declaration and prescribed documents, including Aadhaar, from age 16 onward

C. Wait for an aggregator to register the worker automatically after the first payment

D. Complete a minimum period of platform work before becoming eligible to register

Answer: (B)

Explanation

Unorganised, gig, and platform workers aged 16 or older generally need registration through self-declaration and prescribed documents such as Aadhaar to access schemes. Belonging to a covered worker category does not itself provide access without completing the registration gateway.

21. Within the statutory range, what contribution must an aggregator make toward worker welfare?

A. Between 5% and 10% of worker payments, capped at 2% of annual turnover

B. Between 5% and 10% of annual turnover, capped at 2% of worker payments

C. Between 1% and 2% of annual turnover, capped at 5% of payments to workers

D. Between 1% and 2% of worker payments, capped at 5% of annual turnover

Answer: (C)

Explanation

The aggregator contribution is set between 1% and 2% of annual turnover, with a ceiling of 5% of payments made to workers. The alternative formulas reverse the relevant bases or use percentages outside the stated statutory range.

22. What is the primary function of a career centre?

A. To guarantee that every registered candidate receives a job offer

B. To approve employment contracts between employers and candidates

C. To provide employment information, career services, and vocational guidance

D. To determine the wages payable for all notified vacancies

Answer: (C)

Explanation

A career centre provides career services and information about employers, candidates, vacancies, and vocational guidance. It does not guarantee recruitment, because its role is informational and advisory rather than a promise of employment.

23. What must a specified employer do before filling a notified vacancy?

A. Report the vacancy to a career centre without being required to recruit through it

B. Obtain approval from a career centre before creating or extending the vacancy

C. Recruit a qualified candidate through a career centre before considering other applicants

D. Publish the vacancy through a career centre and accept its recommended candidate

Answer: (A)

Explanation

Specified employers must report notified vacancies to career centres before filling them, but reporting does not require recruitment through the centre. The reporting rule supports labour-market information rather than imposing a hiring channel.

24. What penalty may apply when an employer fails to pay employees' contributions deducted from their wages?

A. A fine of Rs.50,000 and imprisonment for two to six months

B. A fine of Rs.1,00,000 with imprisonment limited to six months

C. A fine of Rs.1,00,000 and imprisonment for one to three years

D. A warning followed by a fine based on the employer's annual turnover

Answer: (C)

Explanation

Failure to pay contributions deducted from employees' wages may attract a fine of Rs.1,00,000 and imprisonment for one to three years. The lower fine and shorter imprisonment relate to non-payment of a contribution under the Code more generally.

25. Which sequence best describes the role of the Inspector-cum-Facilitator?

A. Collect employee contributions, administer benefit schemes, and settle claims without inspecting establishments

B. Provide guidance, conduct technology-driven inspections, allow rectification where applicable, and prosecute unresolved violations

C. Conduct punitive inspections, impose every penalty directly, and prevent employers from correcting reported violations

D. Review wage agreements, approve recruitment decisions, and refer all workplace disputes to courts

Answer: (B)

Explanation

The Inspector-cum-Facilitator combines guidance with technology-driven inspections, possible rectification, and prosecution when violations remain unresolved. This differs from treating inspection as an exclusively enforcement-focused process with no facilitation role.

26. Why does full operational clarity remain dependent on further implementation in the stated transitional position?

A. Employers were exempt from compliance until every court challenge was resolved

B. All earlier social-security schemes had already been repealed without replacement

C. Several Central Government and Karnataka Rules were still described as being in draft form

D. The Code had not been enacted and no provisions had legal effect

Answer: (C)

Explanation

The Code was described as being in force, while several implementing Rules notified by the Central Government and Karnataka remained in draft form. Therefore, practical clarity depends on final notification and implementation rather than on the Code lacking enactment.

27. For how long do earlier EPF, ESI, and related schemes generally continue after commencement?

A. Until employers voluntarily adopt the Code's replacement procedures

B. For two years, including provisions that conflict with the Code

C. Until every new scheme has operated for five years without amendment

D. For one year, to the extent that they are not inconsistent with the Code

Answer: (D)

Explanation

Earlier schemes, rules, regulations, and procedures continue for one year from commencement insofar as they are consistent with the Code. Provisions that conflict with the Code do not receive that transitional continuation.