Sections 154 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 154 and 155 are the source of the rules that supply the forms, time limits and procedures the Code leaves open. Section 154 gives the power to the appropriate Government; section 155 gives it to the Central Government. Each sets out a long, non-exhaustive list of matters.
The appropriate Government (s.154) and the Central Government (s.155) may make rules by notification, subject to previous publication, not inconsistent with the Code. Each section has a general power plus a list "without prejudice to the generality" of the power. Section 155 has the longer list, with items on registration, boards, ESI, gratuity, maternity benefit, cess, compounding, funds and exemption. The Central Rules, 2026 (G.S.R. 344(E), 8 May 2026) were made under ss.154, 155, 158 and 159.
Why it matters
The Code states the principle; the rules state how, when and in which form. An employer cannot comply with the Code by reading the Code alone: registration time limits, nomination forms, compounding procedure and exemption conditions sit in rules. Knowing which Government makes which rule tells you which rulebook applies to your establishment. Our legal consultation service can help you work out which set of rules governs your operations. For the next provisions on rules, see sections 156 to 158.
Section 154: rules by the appropriate Government
- 154(1): the appropriate Government may, by notification and subject to previous publication, make rules not inconsistent with the Code to give effect to its provisions.
- 154(2): a list of matters, including:
| Area | Matters the rules may provide for (examples from s.154(2)) |
|---|---|
| Building Workers' Welfare Board (s.7(6)) | Amounts for group insurance premium of beneficiaries, children's education schemes and medical expenses for major ailments (clause (a)) |
| ESI appeals and court | Manner and time for second appeal to the Employees' Insurance Court; commencement of proceedings, fees and procedure (clauses (b), (c)) |
| Gratuity | Bank or institution for investing a minor's gratuity; time, form and manner of nomination and its modification (s.55); form of application (s.56); registration and trustees of approved gratuity fund and recovery from insurer (s.57); competent authority's qualifications (s.58) (clauses (d) to (h)) |
| Compensation | Appeal authority (s.72(3)); notice-book (s.82(4)); memorandum register (s.89(1)); competent authority qualifications (s.91) (clauses (i) to (l)) |
| Cess and welfare | Time limit to pay cess (s.101); fees for appeal (s.105(2)) (clauses (m), (n)) |
| Property and funds | Conditions on property, investment and loans (s.120); writing off irrecoverable dues (s.121) (clauses (o), (p)) |
| Inspection and records | Other Inspector-cum-Facilitator powers (s.122(6)(e)); records, registers, notices and returns (s.123) (clauses (q), (r)) |
| Offences and vacancies | Form and manner of compounding application (s.138(4)); reporting vacancies and returns (s.139(2)) (clauses (s), (t)) |
| Exemption and misuse | Time for Board or Corporation views, post-exemption conditions and trust management (s.143); manner of determining misuse (s.148) (clauses (u), (v)) |
| Residual | Any other matter to be prescribed by the appropriate Government (clause (w)) |
Section 155: rules by the Central Government
- 155(1): the Central Government may, by notification and subject to previous publication, make rules not inconsistent with the Code.
- 155(2): a list of matters running from clause (a) to (zv). The groups below paraphrase the clauses:
| Group | Examples (section of the Code) |
|---|---|
| Applicability and definitions | Making Chapter III or IV inapplicable to an establishment (s.1); career centres, dependent parents' income and occupier for ships (s.2) |
| Registration | Time and manner of registration, cancellation on closure (s.3) |
| Organisations | Administration and terms of the Central Board and Executive Committee (s.4); the Corporation, Standing Committee and Medical Benefit Committee (s.5); National Social Security Board (s.6); meetings and fees (s.9); reconstitution (s.11) |
| Provident fund | Provident fund account for an establishment (s.21); form, manner, time limits and fees of appeal (s.23) |
| ESI | Director General and Financial Commissioner (s.24); investment and expenditure (ss.25-27); insurance of employees (s.28); rate of contributions (s.29); administrative expenses (s.30); benefits and dependants' benefit (ss.32, 38, 39) |
| Gratuity and maternity | Insurance and approved gratuity fund (s.57); notice and proof for maternity benefit (s.62); proof of miscarriage, tubectomy, illness (s.65); duration of breaks (s.66); crèche numbers and distance (s.67); gross misconduct (s.68) |
| Compensation | Rate of interest by employer (s.77); notice and money transmission (s.92); form, manner and fee of application (s.93) |
| Cess and building workers | Collection and deposit of cess and advance cess rates (s.100); interest on delayed cess (s.101); self-assessment (s.103); penalty authority (s.104); appeal (s.105); registration and benefits of beneficiaries (ss.106, 107) |
| Gig and unorganised workers | Eligible age and manner of registration (s.113); matters under s.114(7)(i) |
| Fund and exemption | Social Security Fund (s.141(4)); eligibility, conditions and extension of exemption (s.143) |
| Residual | Any other matter to be prescribed by the Central Government (clause (zv)) |
Contribution rates and wage ceilings: s.155(2)(q) says rules may provide the rate of contributions under s.29(2). Read the rate from the Rules or notifications in force; this article does not quote one.
Conditions common to both sections
- Rules are made by notification.
- They are subject to previous publication under section 158 (draft published at least 45 days before the date specified; see our article). The Central Government may dispense with this in an epidemic, pandemic or disaster.
- They must be not inconsistent with the Code.
- Rules made by the Central Government are laid before Parliament under section 160 (see sections 159 and 160).
The Central Rules, 2026
The Code on Social Security (Central) Rules, 2026, notified as G.S.R. 344(E) on 8 May 2026 after a draft published on 30 December 2025 (G.S.R. 935(E)), were made under sections 154, 155, 158 and 159. They apply where the Central Government is the appropriate Government, and come into force on publication in the Official Gazette (rule 1(2)). Where the State Government is the appropriate Government, the State's own rules apply.
A worked example
An employer asks how to apply to compound a first-time offence. Section 138(4) says the application is in the form and manner prescribed by the appropriate Government; s.154(2)(s) and s.155(2)(zs) are the rule-making sources, and Rule 54 of the Central Rules, 2026 sets the electronic notice and payment steps for offences compounded by the Central Government's officer. For a State-controlled shop, the State's rules would answer the same question. (Illustrative.)
Need help finding the rule that applies to you?
Identifying the appropriate Government and then the right rule, form and time limit is often the hardest step. Our legal consultation team can help you map your establishment to the correct rulebook and keep track of later notifications.
Key takeaways
- Section 154: rules by the appropriate Government; section 155: rules by the Central Government.
- Both need notification and previous publication, and must be consistent with the Code.
- The lists are illustrative: each ends with a residual clause.
- The Central Rules, 2026 were made under ss.154, 155, 158 and 159.
- For State-controlled establishments, State rules apply.
Read next
- Sections 156 to 158: State rules, Corporation regulations and prior publication
- Sections 159 and 160: Rules for transfer and laying before Parliament
- Sections 136 to 138: Cognizance, prior notice and compounding
- 4 new labour codes 2020: complete guide
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.