The Centre is mulling extension of medical benefits provided by the Employees State Insurance Corporation (ESIC) to the unorganised sector and gig workers. The interim Budget may see some legislative traction on the same. Banasree Purkayastha takes a look at the existing regime for gig workers in the country
l Code on Social Security
In 2020, the Centre published the draft Social Security Code, which integrates nine different laws related to labour welfare and rights. The Code on Social Security, 2020, envisaged extension of social security benefits to gig and platform workers, to be implemented through the Employees’ Provident Fund Organisation (EPFO) and the ESIC.
At present, only organised sector workers get EPFO and ESIC benefits. The Code also provides for framing of schemes on life and disability cover, accident insurance, health and maternity benefits, old age protection, etc, for gig/platform workers. It talks of a Social Security Fund, with aggregators of gig services contributing 1-2% of their annual turnover, subject to the limit of 5% of the amount paid or payable by an aggregator to such workers. The Code has not been rolled out, since all the states have not yet ratified the draft rules.
l India’s gig workforce
A NITI Aayog report projects the Indian gig workforce to rise to 2.35 crore workers by 2029-30, a 200% jump from the current 77 lakh—31% of the workers are in low-skilled work, 47% in medium-skilled work, and 22% are in high-skilled work. Meanwhile, the
e-Shram portal, launched in 2021 to create a national database of unorganised workers, has seen registration of over 29.33 crore persons so far.
A survey by Nasscom and job portal Indeed says 84% of organisations are exploring or open to gig workers. While start-ups and the business process management (BPM) sector are leading in gig-worker hiring, flexible job locations and a focus on specialised skills are the primary drivers for Gen Z and millennials opting for gig roles. However, the gig worker who faces the brunt of uncertain working conditions the most is the one who works on the road, whether the delivery boy engaged with an online platform or the truck driver traversing through the length and breadth of the country.
l States at the forefront
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, encompasses two key players in the gig economy: aggregators (digital intermediaries linking buyers and sellers), and primary employers that are individuals or organisations directly engaging platform-based gig workers for a particular task against payment. Most importantly, it introduces the Platform Based Gig Workers Welfare Cess, a monthly contribution from aggregators and primary employers. This welfare cess, ranging from 1% to 2% of the value of each transaction—along with worker contributions, government grants, and donations—will be pooled under the Rajasthan Platform Based Gig Workers Social Security and Welfare
Fund. The Rajasthan law also envisages a Platform Based Gig Workers Welfare Board, which will notify schemes for registered workers, on social security, medical emergencies, health insurance, etc.
Meanwhile, the Karnataka government has announced that all gig workers in the state will receive free life insurance and accident insurance of `2 lakh each. There are more than 2 lakh gig workers registered with app-based platforms in Bengaluru alone. The state is also planning to table a gig workers’ welfare Bill in the next Assembly session. The Bill will also establish a fund to provide social security and protection to gig workers.
l Cover for gig workers in other countries
Social insurance coverage is low among gig workers globally. Europe is ahead of others on protection of platform workers’ rights. The UK has introduced the concept of “worker” status, which falls somewhere between being an employee and an independent contractor, thus granting gig workers certain employment rights, such as minimum wage and paid time off.
Gig workers in Germany are allowed to join unions and engage in collective bargaining while. France has taken steps to regulate digital platforms, requiring them to provide gig workers with certain protections, such as insurance cover. In the United States, gig workers often face classification as independent contractors though the Biden administration has introduced a draft rule that could result in more “gig” workers being considered full-time employees.