Social Security for Unorganised Workers — Labour Law II Notes :: Medha Academy

Nine in ten Indian workers are unorganised — the street vendor, the farm hand, the domestic worker, the rickshaw puller. When the COVID lockdown hit, they had no ESI, no PF, no employer to fall back on. The unorganised-workers scheme is the State’s attempt to build a safety net under exactly these workers.

Who they are, the schemes, and the Board that runs them

An unorganised worker is a home-based worker, self-employed worker, or a wage worker in the unorganised sector not covered by ESI/PF/gratuity. They are covered by Chapter IX of the Code on Social Security, 2020 (carrying forward the Unorganised Workers’ Social Security Act, 2008).

Schemes (Section 109). The Central Government may frame and notify welfare schemes for unorganised workers on:

life and disability cover;
health and maternity benefits;
old-age protection / pension; and
any other benefit (education, housing, funeral).

The State Government may frame schemes on provident fund, employment injury, housing, educational schemes for children, skill upgradation, funeral assistance and old-age homes (Section 109), with funding shared as notified (Section 110). Familiar real schemes include PM-SYM (pension), PMJJBY/PMSBY (insurance) and Ayushman Bharat (health).

The National Social Security Board (Section 6). A tripartite Board — chaired by the Union Labour Minister, with members representing unorganised workers, employers, civil society, and the Government —

recommends suitable schemes to the Central Government;
advises on and monitors their implementation; and
reviews the working of the schemes and the registration of workers.

Corresponding State Unorganised Workers’ Boards do the same at State level.

Registration (Section 113) — an unorganised worker (16–59, with self- declaration and Aadhaar) registers to become eligible for benefits, now through the e-Shram portal.

Section 109(1), Code on Social Security 2020 (in brief): “The Central Government shall … formulate and notify … suitable welfare schemes for unorganised workers … on matters relating to — (i) life and disability cover; (ii) health and maternity benefits; (iii) old age protection …”

In Simple Terms: Unorganised workers are those outside ESI/PF. The Centre and States frame welfare schemes (life, health, maternity, pension, etc.); a tripartite National Social Security Board recommends and monitors them; and a worker registers (e-Shram) to claim.

🧩 WORKED EXAMPLE — schemes for the unorganised during a crisis

Facts. During a pandemic, an unregistered street vendor seeks social-security help.

Rule. The Centre/States frame schemes (life/disability, health, old-age) for unorganised workers (s.109); eligibility follows registration (s.113).

Apply. The vendor registers (e-Shram) as an unorganised worker and becomes eligible for the notified insurance/health/pension schemes; the National Social Security Board monitors delivery.

Conclusion. He can access the notified schemes once registered — the scheme reaches workers who have no employer to rely on.

flowchart TD
    ROOT["Unorganised Workers (CSS Ch IX)"]:::root
    ROOT --> DEF["Unorganised worker: outside ESI/PF (home-based/self/wage)"]:::leaf
    ROOT --> SCH["Schemes (s.109): life/disability, health/maternity, old-age"]:::leaf
    ROOT --> BOARD["National Social Security Board (s.6): recommend, advise, monitor"]:::leaf
    ROOT --> REG["Register (s.113) via e-Shram -> benefits"]:::pay
    classDef root fill:#FFF8DC,stroke:#000,stroke-width:1px,color:#000;
    classDef leaf fill:#E6F3FF,stroke:#1E3A8A,color:#000;
    classDef pay fill:#E7F6E7,stroke:#217a21,color:#000;
    linkStyle default stroke:#888,stroke-width:1px;

Case Laws

Bandhua Mukti Morcha v Union of India (1984) — the State’s duty to secure social security and humane conditions extends to the unorganised and most vulnerable workers.
In re: Problems and Miseries of Migrant Labourers (2020) — the Supreme Court directed registration and welfare delivery (including e-Shram and portable benefits) for unorganised and migrant workers.

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