Sections 109 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Sections 109 to 112 open Chapter IX. They require the Central and State Governments to frame welfare schemes for unorganised workers, allow schemes to be funded from several sources, require records to be kept, and let the appropriate Government set up a helpline and facilitation centres.
The Central Government frames schemes on life and disability cover, health and maternity benefits, old age protection and education (s.109(1)). The State Government frames schemes including provident fund, employment injury benefit, housing, children's education, skill upgradation, funeral assistance and old age homes (s.109(2)). Funding can be wholly Government, shared, or from contributions or CSR (ss.109(3), 110). Each scheme must say how records are kept (s.111), and a helpline or facilitation centres may be set up (s.112).
Why it matters
These sections do not impose a contribution on every employer. They are the legal basis on which Governments design welfare schemes for unorganised workers, and they explain who pays and who administers. Employers, CSR teams and contractors who engage unorganised labour should know where they may be asked to contribute. For advice on how these schemes touch your workforce, see our labour law compliance service. The definition of "unorganised worker" is in section 2; registration follows in sections 113 and 114.
Section 109: schemes by Central and State Governments
| Who | Matters the schemes cover |
|---|---|
| Central Government (s.109(1)) | (i) life and disability cover; (ii) health and maternity benefits; (iii) old age protection; (iv) education; (v) any other benefit the Central Government determines |
| State Government (s.109(2)) | (i) provident fund; (ii) employment injury benefit; (iii) housing; (iv) educational schemes for children; (v) skill upgradation; (vi) funeral assistance; (vii) old age homes |
How Central schemes may be funded (s.109(3))
- Wholly by the Central Government;
- partly by the Central and partly by the State Government;
- partly by Central, partly by State and partly by contributions from beneficiaries or employers as the scheme specifies; or
- from any source including the CSR fund under the Companies Act, 2013, or another source the scheme specifies.
What a Central scheme must contain (s.109(4))
Each scheme must provide for matters needed for efficient implementation, including: scope, implementing authority, beneficiaries, resources, implementing agency or agencies, and grievance redressal. The Central Government may also constitute a special purpose vehicle to implement any such scheme.
Section 110: funding of State schemes
- A State scheme may be (a) wholly funded by the State; (b) partly by the State and partly by contributions of beneficiaries or employers as the scheme specifies; or (c) funded from any source including the CSR fund or another source the scheme specifies (s.110(1)).
- The State may seek financial assistance from the Centre (s.110(2)); the Centre may provide it for such period and on such terms as it considers fit (s.110(3)).
An employer or beneficiary contribution arises only if the notified scheme says so. The Code itself does not fix any rate for these schemes.
Section 111: record keeping
The Government notifying a scheme under this Chapter must provide in it the form and manner of keeping records, electronically or otherwise, and the authority who will maintain them. The proviso says that records should, as far as possible, bear a continuous number so that the scheme is managed properly and duplication and overlap are avoided.
Section 112: helpline and facilitation centres
The appropriate Government may set up a toll-free call centre or helpline or facilitation centres to perform any of these functions for unorganised, gig and platform workers:
- (a) disseminate information on available social security schemes;
- (b) facilitate filing, processing and forwarding of registration applications;
- (c) assist workers to obtain registration; and
- (d) facilitate enrolment of registered workers in the schemes.
Rule 48 of the Code on Social Security (Central) Rules, 2026 adds that services of business correspondents of the Department of Posts, Common Service Centres or e-sewa kendras may be used to help with registration and updating. Where the State Government is the appropriate Government, the State's own rules apply.
A worked example
A State notifies a funeral assistance scheme for unorganised workers under s.109(2)(vi). The scheme is partly State-funded and partly funded by beneficiary contributions, as s.110(1)(b) permits, and it specifies the record format and the authority holding the records, with continuous numbering as s.111 requires. A worker who is unsure how to register calls the State's helpline, which under s.112 can help with the application. A company wishing to support the scheme through its CSR fund can do so only if the scheme lists that as a source. (Illustrative.)
Need help understanding scheme obligations?
Whether a scheme asks anything of your business depends on its notification. Our labour law compliance team can help you read the scheme terms, registration steps and any contribution or CSR angle that applies to you.
Key takeaways
- Central schemes: life and disability cover, health and maternity, old age protection, education.
- State schemes: PF, employment injury, housing, children's education, skills, funeral help, old age homes.
- Funding may be Government, shared, contributory or CSR; contributions apply only if the scheme says so.
- Schemes must state record-keeping form and authority, with continuous numbering.
- The appropriate Government may set up a helpline and facilitation centres.
Read next
- Sections 113 and 114: Registration and schemes for gig and platform workers
- Section 2 definitions: Gig worker, platform worker and unorganised worker
- Sections 106 to 108: Building worker beneficiaries and welfare fund
- Maternity benefit for contract and gig workers
Disclaimer: Based on the Code on Social Security, 2020 (as enacted) and, where noted, the Code on Social Security (Central) Rules, 2026 (G.S.R. 344(E), 8 May 2026), as on 30 September 2026. The Code is in force from 21 November 2025; some provisions may be notified later, and State Governments make their own rules for establishments where the State is the appropriate Government. Verify the current position before acting.