EXECUTIVE SUMMARY

India’s gig workforce is expected to expand to 2.35 crore by 2029-30. Gig workers can be broadly classified into the platform and non-platform workers. Platform workers are those whose work is based on online software apps or digital platforms while non-platform gig workers are generally casual wage workers, working part-time or full-time. The Code on Social Security, 2020 recognizes gig workers and platform workers as a separate class of workers and envisages extension of social security benefits to them, however no welfare scheme specifically for gig workers has been notified as of yet.

GIG WORKERS AND PLATFORM WORKERS UNDER THE CODE OF SOCIAL SECURITY, 2020

In 2020, the Government of India enacted the Code on Social Security, 2020 (Code), which integrates nine different laws related to labour welfare and rights. The Code introduces and recognizes gig workers and platform workers as a separate class of workers and envisages extension of social security benefits to them.

The Code defines ‘gig worker’ and ‘platform worker’ and proposes setting up, inter alia, of helpline, facilitation centre for gig workers and platform workers by the appropriate Government to assist them to, inter alia, obtain registration, to facilitate their enrolment in the social security schemes. ‘Gig worker’ is defined under the Code to mean “a person who performs work or participates in a work arrangement and earns from such activities outside of traditional employer-employee relationship.” Platform workers means a person engaged in or undertaking platform work (i.e. a work arrangement outside of a traditional employer employee relationship in which organisations or individuals use an online platform to access other organisations or individuals to solve specific problems or to provide specific services or any such other activities which may be notified by the Central Government, in exchange for payment).

Chapter IX of the Code further provides for framing of suitable social security schemes for gig workers and platform workers on matters relating to life and disability coverage, health and maternity benefits, old age protection, accident insurance, and crèche. The Code also provides for setting up a Social Security Fund. One of the sources of fund, is contribution from ‘aggregator’^[1] of between 1 to 2% of annual turnover of an aggregator (which falls within the category of aggregators, as specified in the Seventh Schedule^[2] of the Code), subject to the limit of 5% of the amount paid or payable by an aggregator to such workers.^[3]  In order to take advantage of the benefits, both platform workers and gig workers are required to register under Section 113 of the Code.

Section 114(7)(i) of the Code states that the Government of India may provide, inter alia, the details of (a) the authority to collect and to expend the proceeds of contribution collected; (b) the rate of interest to be paid by an aggregator in case of delayed payment, less payment or non-payment of contribution; (c) self-assessment of contribution by aggregators; (d) conditions for cessation of a gig worker or a platform worker; and (e) any other matter relating to smooth functioning of the social security scheme notified under Section 114 of the Code. The section clarifies that for the purposes of this section, an aggregator having more than one business shall be treated as a separate business entity or aggregator.

DRAFT CENTRAL RULES UNDER THE CODE OF SOCIAL SECURITY, 2020

The draft central rules (Draft Central Rules) framed by the Government of India under the Code imposes obligations on the aggregators, inter alia, to:

(i) link their database with the unique registration number of the gig worker / platform worker, on the Shram Suvidha portal or any other portal, as may be specified by the Government of India; and

(ii) assess contribution payable under Section 114 (4) of the Code in the prescribed Form and pay provisional contribution as assessed in the designated account of the Social Security Fund.

The Draft Central Rules further state that if any aggregator fails to pay any amount of contribution payable under Section 114(4), within such time as may be specified by the Government of India, such aggregator shall be liable to pay interest on the amount of contribution, to be paid, at the rate of 1% for every month or part of a month comprised in the period from the date on which such payment was due till such amount is actually paid.

STATE INITATIVES

Rajasthan is the first state to have passed a law ensuring social security for platform-based gig workers. The Rajasthan Platform-Based Gig Workers (Registration and Welfare) Act, 2023 (Rajasthan Gig Workers Act), applies to ‘aggregators’ (digital intermediaries connecting buyers and sellers) and ‘primary employers’ (individuals or organisations engaging platform-based gig workers). It is the first state-level law in India that regulates the engagement of gig workers in establishments. While the Rajasthan Gig Workers Act has been approved in September last year, the rules for the same have not been framed by the State Government yet.

The definition of a ‘gig worker’ under the Rajasthan Gig Workers Act is broadly aligned with the Code and includes a person who performs work or participates in a work arrangement and earns from such activities outside the traditional employer-employee relationship. The Rajasthan Gig Workers Act also includes within its ambit (of gig workers), any person who works on a contract that results in a given rate of payment, based on the terms and conditions laid down in such contract and includes all piece-rate work.

The Rajasthan Gig Workers Act states that the State government shall establish “Rajasthan Platform Based Gig Workers Social Security and Welfare
Fund” for the benefit of registered platform based gig workers and worker contributions, government grants, and donations will be pooled under this fund.

The Karnataka government has also announced that all gig workers in the State will receive free life insurance and accident insurance of INR 2 lakhs. The Karnataka State Gig Workers Insurance Scheme intends to cover the following workers “food delivery boys of Swiggy, Zomato etc., and all unorganised gig workers engaged in delivery profession with e-commerce establishments such as Amazon, Flipkart, Porter, Pharmacy, Blinkit, Zepto, Big Basket, Domino’s, etc.” The insurance benefit extends to on duty as well as off duty accidents.

TO BEAR IN MIND

The provisions under the Code relating to gig and platform worker are yet to come into force and no welfare scheme specifically for gig workers has been notified as of yet. It therefore remains to seen how the government addresses and provides social security benefits to the rapidly burgeoning gig workforce.

[1] Section 2(2) of the Code defines “aggregator” to mean a digital intermediary or a market place for a buyer or user of a service to connect with the seller or the service provider.

[2] The Seventh Schedule of the Code provides for the following classification of aggregators – (i) Ride sharing services; (ii) Food and grocery delivery services; (iii) Logistic services; (iv) e-Market place (both market place and inventory model) for wholesale/ retail sale of goods and/or services (B2B/B2C); (v) Professional services provider; (vi) Healthcare; (vii) Travel and hospitality; (viii) Content and media services; (ix) Any other goods and services provider platform.

[3] Section 114(4) of the Code.