The government, it would appear, has learned no lessons from India’s sad history of trade unionism and other poor labour policies, and wants to bring in a version of this for domestic workers. High minimum wages and dealing with intransigent trade unions is the main reason for India’s poor employment creation, but the National Policy for Domestic Workers seeks to replicate part of this. The draft policy, on which comments have been invited, wants to give workers minimum wages, equal remuneration, the right to form unions, have mechanisms for grievance resolution and dispute resolution, and access to social security benefits like medical insurance, maternity benefits and old age pensions—paying for the last set of benefits ‘may include contribution from employers and workers’. While unionisation and equal remuneration are a red rag for most employers—imagine negotiating a salary/hike with union representatives—pension and health benefits are a good idea; but how is this to be implemented? If employers have to deposit this in pension accounts—this is easier now with Aadhaar since there can be one account that can be ported across jobs—this makes it cumbersome and it is not clear the EPFO/PFRDA has the capability of policing millions of households; also, if the deduction is a significant portion of the salary, domestic workers may prefer to enter into informal contracts to raise their cash-in-hand component.
Also, pensions have to be a function of monthly contributions, but if the government is to suddenly stipulate a minimum pension, as it did in the case of the Employees Pension Scheme, employers will be that much more reluctant to hire workers. Restricting this to various government-funded schemes is a far more sensible idea. As minimum wages get hiked beyond a point, and there is a large element of populism here, employers will start looking at cutting back employment wherever possible—from washing machines to dishwashers, even home-delivered dabbas. Regulating placement agencies is a good idea insofar as rules to ensure domestic workers get their salaries on time instead of the agency pocketing their salaries, but if the regulation is too tight—fixing the commissions levels at a low level—it may disincentivise placement agencies.
The proposed policy seems like old wine in a new bottle—in 2010, the National Commission for Women had drafted a model Domestic Workers Welfare and Social Security law which broadly covered similar points. A prime example of how such laws/policies fail is the fact that the Unorganised Workers Social Security Act that talks of a raft of social security provisions for unorganised workers, including domestic workers—from provident fund, old-age pension and maternity benefits to employment injury compensation and old age homes—has been in force since 2008, but in 2017, the government is still talking of a policy on similar lines to address the same issues. There is no denying that there are real concerns regarding the social security cover and exploitation of domestic workers, but one more policy that will likely worsen matters is not the answer.