Question map
With reference to casual workers employed in India, consider the following statements : 1. All casual workers are entitled for Employees Provident Fund coverage. 2. All casual workers are entitled for regular working hours and overtime payment. 3. The government can by a notification specify that an establishment or industry shall pay wages only through its bank account. Which of the above statements are correct?
Explanation
The correct answer is Option 2 (2 and 3 only). This is based on the following legal frameworks in India:
- Statement 1 is incorrect: Under the EPF Act, 1952, coverage is not universal for "all" casual workers. It generally applies to establishments with 20 or more employees. Furthermore, workers earning above a certain wage ceiling (currently βΉ15,000) may be excluded unless they were already members.
- Statement 2 is correct: The Minimum Wages Act and the Factories Act provide that any worker, including casual labor, is entitled to fixed working hours. Work performed beyond these hours must be compensated with overtime payment, usually at double the ordinary rate of wages.
- Statement 3 is correct: According to the Payment of Wages (Amendment) Act, 2017, the appropriate government can notify specific industries or establishments to pay wages exclusively through bank accounts or cheques to ensure transparency and prevent exploitation.
Therefore, while statements 2 and 3 represent statutory rights and powers, the universal claim in statement 1 is legally inaccurate.
PROVENANCE & STUDY PATTERN
Full viewThis question is a classic 'Heuristic Trap'. Aspirants blindly eliminating 'All' (Statements 1 & 2) got slaughtered. The question asks about 'Legal Entitlement' (Theory), not 'Ground Implementation' (Reality). In Indian Law, definitions of 'Employee' are broad and inclusive; therefore, statutory rights often extend to 'All' casual workers, even if enforcement is weak.
This question can be broken into the following sub-statements. Tap a statement sentence to jump into its detailed analysis.
- Statement 1: Are all casual workers employed in India entitled to Employees' Provident Fund (EPF) coverage under Indian law?
- Statement 2: Are all casual workers employed in India entitled to regular working hours and overtime payment under Indian labour laws?
- Statement 3: Can the Government of India, by notification, require establishments or industries employing casual workers in India to pay wages only through bank accounts?
- Explicitly states the Social Security Code expands coverage to "all workers", which would encompass casual workers.
- Specifically includes provident fund benefits as part of the coverage extended to all workers.
- Specifies the Code on Social Security, 2020 provides social security coverage to all workers, naming PF (Provident Fund) among benefits.
- Reinforces that gig and platform workers β categories analogous to casual/unorganized workers β are included.
States the statutory trigger for EPF: establishments with more than 20 workers must register with EPFO, and only employees with salary up to Rs.15,000 contribute to EPFβimplying not every worker in every workplace is automatically covered.
A student could combine this with the fact that many casual workers earn daily wages or higher/lower pay to infer that some casuals (in small workplaces or above the salary threshold) may be outside mandatory EPF coverage and thus test the statement.
Explains the Code on Social Security rule: EPFO coverage applies to establishments having 20 or more workers and smaller establishments may join voluntarilyβshowing coverage depends on establishment size.
By noting that many casual workers are employed in small establishments or the unorganised sector, a student can suspect that many casuals lack mandatory EPF entitlement and seek confirmation.
Defines casual workers as daily-wage employees who are not given social security benefits like provident fund, explicitly linking casual status to typical exclusion from PF.
A student could use this definition plus data on the composition of casual employment to judge whether 'all casual workers' would realistically be covered by EPF.
Notes absence of regulations protecting freelancers and mentions lack of retirement benefits for many workers in gig/informal economy, indicating gaps in social security coverage for non-regular workers.
Combine with knowledge that casual workers often work informally or in gig arrangements to infer many may be outside statutory EPF coverage, prompting targeted verification.
- Code on Wages (2019) introduces a 'floor wage' applicable to workers in both organized and unorganized sectors.
- The code requires that the rate for overtime work shall not be less than twice the normal wage, creating a statutory overtime entitlement.
- The Occupational Safety, Health and Working Conditions Code, 2020 limits working hours to 8 per day.
- The Code specifies overtime requires workers' consent and that overtime wages have to be doubled, defining working-hours and overtime rules.
- The Minimum Wages Act (as referenced) protects both regular and casual workers, demonstrating that casual workers are included in statutory labour protections.
- Inclusion under minimum-wage law supports the broader application of wage-related protections to casual workers.
- Explicitly states that the 'appropriate Government may, by notification, require' employers in every establishment or any class/category of establishments to take specified action.
- Shows statutory power by notification to impose requirements on employers across establishments, which can encompass modes of payment.
- Specifies a default mode of wage payment (minimum wages 'shall be paid in cash').
- Carries an express proviso that the 'appropriate Government ... may, by notification ... authorise' payment in a different mode (in kind), demonstrating the Government's power by notification to change the mode of wage payment.
- Refers to remission of payments 'into the accredited bank of the PAO concerned' for casual labourers, indicating use of bank remittances in payment processes for casual workers.
- Provides contextual practice showing government payments to casual labourers being routed through banks.
MGNREGA explicitly requires that programme wages be paid directly into bank or post office accounts, showing the government can mandate a specific mode of wage payment for a central scheme.
A student could use this precedent to argue the Centre has in practice required bank/post payments for workers under statutory programmes and then check whether similar powers exist for other categories of workers or via notification under labour laws.
The Code on Wages (2019) governs wage-related matters (e.g., timelines for payment), indicating the central government has regulatory authority over payment rules for wages.
One could examine the Code's provisions and subordinate powers (rules/notifications) to see if the Centre can prescribe payment mode (bank-only) for establishments via notification.
The Minimum Wages Act historically protects casual workers and wage rates are set by Centre and States, showing labour law regimes already target casual workers and divide responsibilities between governments.
Combine this with knowledge of which statutory acts allow notifications to prescribe conditions of employment to assess if mode-of-payment could be similarly imposed for casual workers.
The RBI-created payment banks aim to bring low-income and migrant workers into the formal banking system, providing institutional capacity to implement bank-based wage payments.
A student could use this to assess practical feasibility and whether infrastructure exists for large-scale mandatory bank payments to casual workers.
Provisions addressing inter-state migrant workers include maintaining databases and employer responsibilities, implying the government can impose administrative obligations on employers for worker welfare.
This pattern suggests a basis for the Centre or States to require employers to adopt specific practices (potentially including payment modes) and prompts checking the statutory scope for such notifications.
- [THE VERDICT]: Trap / Conceptual Bouncer. Source: The Code on Social Security, 2020 & Payment of Wages (Amendment) Act, 2017.
- [THE CONCEPTUAL TRIGGER]: Labour Reforms & The 4 Labour Codes (Wages, Social Security, Industrial Relations, OSH).
- [THE HORIZONTAL EXPANSION]: 1. Payment of Wages Act 2017 Amendment (Govt can mandate bank transfers). 2. Maternity Benefit Act (Applies to casuals if worked 80 days). 3. Gratuity (New Code allows pro-rata gratuity for Fixed Term Employment < 5 years). 4. Floor Wage (Statutory concept by Centre) vs Minimum Wage. 5. e-Shram Portal (Database for Unorganised workers).
- [THE STRATEGIC METACOGNITION]: Stop confusing 'Is it happening?' with 'Is it the law?'. UPSC asks about the Statute. If the Supreme Court or an Act says 'Casual workers are employees', then 'All casual workers are entitled' is TRUE. Study the *definitions* section of Acts, not just the headlines.
EPF entitlement depends on whether the establishment meets the worker-count threshold and on an employee's salary level.
High-yield for questions on labour law and social security: helps determine who is mandatorily covered and when registration is required. Connects to labour reforms and policy debates on formalisation; useful for comparing statutory entitlements across schemes and for solving fact-pattern questions about applicability.
- Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 8: Inclusive growth and issues > Employees Provident Fund (EPF) Scheme > p. 267
- Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 8: Inclusive growth and issues > 3. The Code on Social Security, 2020 > p. 263
Casual workers are defined as daily-wage hired workers and are typically excluded from social security benefits such as provident fund.
Essential for UPSC answers on informalisation and labour vulnerability: frames policy challenges for extending benefits, links to topics on unemployment, social protection, and gig economy regulation. Enables answering questions about coverage gaps and reform needs.
- Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 3: Poverty, Inequality and Unemployment > CASUALISATION AND INFORMALISATION OF {f W}ORKFORCE > p. 56
- Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 19: Population and Demographic Dividend > Challenges or Criticisms > p. 576
Smaller establishments can join EPFO on a voluntary basis, while mandatory coverage applies once worker-count thresholds are met.
Useful for scoring essays/answers on implementation of social security law and the Code on Social Security. Helps distinguish legal obligations from optional compliance and supports analyses of policy incentives for formalisation.
- Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 8: Inclusive growth and issues > 3. The Code on Social Security, 2020 > p. 263
Overtime pay must be at least twice the normal rate and the code is applicable to workers in both organized and unorganized sectors, covering casual workers.
High-yield for questions on labour reform and worker entitlements: it clarifies statutory overtime rates and coverage across sectors, links directly to debates on formalisation and minimum wages, and helps answer whether protections extend to casual/unorganised workers.
- Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 8: Inclusive growth and issues > 1. The Code on Wages, 2019 > p. 261
- Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 8: Inclusive growth and issues > Minimum Wages > p. 262
The Code sets an 8-hour working day and prescribes consent plus doubled wages for overtime, defining the legal framework for regular hours and overtime.
Essential for UPSC questions on labour codes and worker welfare: knowing the 8-hour limit and overtime consent/wage rules helps evaluate employer obligations, worker rights, and policy impacts; connects to industrial relations and labour market regulation topics.
- Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 8: Inclusive growth and issues > 2. The Occupational Safety, Health and Working Conditions Code, 2020 > p. 263
Casual workers are daily-wage earners often lacking social security benefits, while regular workers are on permanent payroll with statutory entitlements; this distinction affects how labour laws are applied and why codes aim to include unorganised workers.
Crucial for questions on informalisation and labour policy: distinguishes categories of workers, explains gaps in protections, and links to schemes and legal reforms aimed at extending rights; enables analysis of coverage and implementation challenges.
- Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 3: Poverty, Inequality and Unemployment > CASUALISATION AND INFORMALISATION OF {f W}ORKFORCE > p. 56
- Understanding Economic Development. Class X . NCERT(Revised ed 2025) > Chapter 2: SECTORS OF THE INDIAN ECONOMY > p. 30
MGNREGA implements direct credit of wages into beneficiaries' bank or post office accounts to ensure transparency and hassle-free transfers.
High-yield for UPSC because it illustrates a concrete instance of government-mandated payment mechanism, connects labour policy with social welfare delivery and transparency reforms, and helps answer questions on implementation methods of employment schemes.
- History , class XII (Tamilnadu state board 2024 ed.) > Chapter 9: Envisioning a New Socio-Economic Order > Mahatma Gandhi National Rural Employment Guarantee Act, 2005 (MGNREGA) > p. 121
- Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 8: Inclusive growth and issues > 1. The Code on Wages, 2019 > p. 261
Fixed Term Employment (FTE) Paradox: Under the new Social Security Code, Fixed Term Employees are entitled to Gratuity on a pro-rata basis even if they work for less than 5 years (unlike regular employees who strictly need 5 years continuous service).
The 'Beneficial Legislation' Heuristic: In questions about vulnerable groups (casual workers, tribals, women), if a statement claims a *Right* or *Protection* (e.g., 'entitled to overtime'), it is almost always CORRECT. The State rarely passes laws to *deny* basic rights to the poor.
Mains GS-3 (Employment/Formalisation): Statement 3 (Bank payments) is a direct link to the 'Formalisation of the Economy' and 'Financial Inclusion' (JAM Trinity). It transforms the 'Shadow Economy' into the formal tax net.