Section 2 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.
Section 2 of the Code on Social Security, 2020 defines more than ninety terms. This article covers the clauses that name the institutions, officers, funds and schemes the Code works through: who the appropriate Government is, what the Central Board and the Corporation are, which bodies count as Social Security Organisations, and who can assess, recover and decide.
The appropriate Government is the Central Government for establishments of the Central sphere listed in s.2(3)(a) and for establishments with departments or branches in more than one State, and the State Government for every other establishment. The Central Board is the Board of Trustees of the Employees' Provident Fund (s.4) and the Corporation is the Employees' State Insurance Corporation (s.5). A Social Security Organisation means one of six bodies listed in s.2(79). The funds and schemes are defined by cross-reference to sections 15 and 16.
Who is the appropriate Government: s.2(3)
| Limb | Appropriate Government |
|---|---|
| 2(3)(a) | The Central Government for an establishment carried on by or under the authority of the Central Government, or a controlled industry specified by notification; railways including metro railways, mines, oil field, major ports, air transport service, telecommunication, banking and insurance company; a corporation or other authority established by a Central Act; central public sector undertakings and their subsidiaries; autonomous bodies owned or controlled by the Central Government (including establishments of contractors for such establishments); any company with not less than 51 per cent. of paid-up share capital held by the Central Government; and an establishment with departments or branches in more than one State |
| 2(3)(b) | The State Government for any other establishment |
Explanation 2 says the Central Government remains the appropriate Government for central public sector undertakings even if its holding falls below fifty per cent. after the Code commences. Under s.2(80), "State Government" includes the Government of a Union territory with legislature and the administrator of a Union territory without legislature.
This matters in practice because the Central Rules apply where the Central Government is the appropriate Government; where the State Government is, the State's own rules apply. If you are unsure which Government applies to your group, our legal consultation team can review your structure.
The two big institutions and their officers
| Clause | Term | Meaning |
|---|---|---|
| 2(10) | Central Board | The Board of Trustees of the Employees' Provident Fund constituted under s.4 |
| 2(11) | Central Provident Fund Commissioner | The Commissioner of the Central Board appointed under s.14(1) |
| 2(22) | Corporation | The Employees' State Insurance Corporation constituted under s.5 |
| 2(49) | National Social Security Board | The National Social Security Board for Unorganised Workers constituted under s.6(1) |
| 2(81) | State Unorganised Workers' Board | The State Unorganised Workers' Social Security Board constituted under s.6(9) |
| 2(8) | Building Workers' Welfare Board | The State Building and other Construction Workers' Welfare Board constituted under s.7(1) |
The constitution of these bodies is covered in sections 4 and 5 and sections 6 and 7.
Social Security Organisation: s.2(79)
The Code names six bodies as Social Security Organisations:
- the Central Board (s.4);
- the Employees' State Insurance Corporation (s.5);
- the National Social Security Board for Unorganised Workers (s.6);
- the State Unorganised Workers' Social Security Board (s.6);
- the State Building and other Construction Workers' Welfare Boards (s.7); and
- any other organisation or special purpose vehicle declared to be the social security organisation by the Central Government.
Much of the Code (accounts, audit, budgets, valuation) applies to "each of the Social Security Organisations", so this list decides which bodies are bound. The clause text cites sections 6 and 7 for the boards in items 4 and 5; read the constituting sections for the exact provisions.
Officers and authorities
| Clause | Term | Meaning |
|---|---|---|
| 2(5) | Authorised Officer | An officer of the Central Board or, as the case may be, of the Corporation, notified by the Central Government |
| 2(16) | Competent authority | An authority appointed under s.58 for Chapter V (gratuity), notified for Chapter VI (maternity benefit), or appointed under s.91 for Chapter VII (employee's compensation), by the appropriate Government or the State Government |
| 2(30) | Executive officer | An officer of the appropriate Government notified for the purposes of Chapter XIII, or an officer authorised in writing by such an officer |
| 2(37) | Inspector-cum-Facilitator | An officer appointed under s.122 |
| 2(68) | Recovery Officer | An officer of the Central Government, the State Government, the Central Board or the Corporation authorised by notification to exercise the powers of a Recovery Officer under the Code |
| 2(84) | Tribunal | The Industrial Tribunal constituted by the appropriate Government under section 7A of the Industrial Disputes Act, 1947 |
The Industrial Disputes Act, 1947 is referred to in the text of clause (84) as written; the IR Code, 2020 addresses that field separately, so check which Tribunal the appropriate Government has designated. See section 122 for the Inspector-cum-Facilitator.
Funds, schemes and related terms
| Clause | Term | Meaning |
|---|---|---|
| 2(63) | Provident Fund | The Employees' Provident Fund established under s.16(1)(a) |
| 2(64) | Provident Fund Scheme | The Employees' Provident Fund Scheme framed under s.15(1)(a) |
| 2(57) | Pension Fund | The Pension Fund established under s.16(1)(b) |
| 2(58) | Pension Scheme | The Employees' Pension Scheme framed under s.15(1)(b) |
| 2(38) | Insurance Fund | The Deposit-Linked Insurance Fund established under s.16(1)(c) |
| 2(40) | Insurance Scheme | The Deposit-Linked Insurance Scheme framed under s.15(1)(c) |
| 2(39) | Insured Person | The Insured Person referred to in s.28 |
| 2(69) | Regulations | Regulations made by the Corporation under the Code |
| 2(9) | Career centre | Any office (including an employment exchange, place or portal) established and maintained in the prescribed manner for career services relating to persons who seek to employ, persons who seek employment, vacancies, and vocational guidance and career counselling |
The three schemes and funds are covered in sections 15 and 16.
Everyday drafting terms
- Notification (s.2(50)): one published in the Gazette of India or the Official Gazette of a State, as the case may be.
- Prescribed (s.2(65)): prescribed by rules made under the Code.
- Schedule (s.2(72)): a Schedule to the Code.
Example. A bank with branches in three States employs 40 staff at each. Under s.2(3)(a), a banking company and an establishment with branches in more than one State both point to the Central Government, so the Central Rules govern its procedures. A local sweet shop with ten employees in one State falls under s.2(3)(b) and the State Government.
Need help reading the definitions against your group?
Identifying the appropriate Government and the right Social Security Organisation for each entity in a group drives which rules, portals and authorities you deal with. Our legal consultation team can walk through your entities and map them to the relevant provisions of the Code.
Key takeaways
- The Central Government is the appropriate Government for the Central-sphere establishments listed in s.2(3)(a), including establishments with branches in more than one State; the State Government covers all others.
- The Central Board is the EPF board and the Corporation is ESIC; both are Social Security Organisations.
- Section 2(79) lists six Social Security Organisations, including any body the Central Government declares.
- Competent authority means a different officer for gratuity, maternity benefit and employee's compensation.
- Provident Fund, Pension and Insurance schemes and funds are defined by reference to ss.15 and 16.
Read next
- Section 3: registration of establishments
- Section 2: definitions of employee, employer, contract labour and fixed-term employment
- Sections 1 and 164: commencement and repeal
- 4 Labour Codes 2020: Wages, IR, OSH and Social Security
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.