Gig and Platform Workers to Be Formally Recognised Under New Social Security Code for First Time

Gig and platform workers are the first time to be legally considered as a category of workforce in India in a historic move. A clear conclusion to the so-called regulatory limbo into which millions of delivery partners and freelancers have been getting involved is the implementation of the Code on Social Security, 2020, which became effective recently. The Ministry of Labour and Employment has created an avenue to an obligatory welfare by specifying the terms used to define what constitutes a gig worker or a platform worker through the stipulation of laws. This action compels digital aggregators namely large ride-hailing and food-delivery applications to make contributions to a special social security fund so that flexibility of the gig economy would no longer be at the expense of basic safety nets.

New Era for Gig Economy Regulation

The core of this reform lies in the new gig economy regulation framework. These workers were previously termed as partners or independent contractors; and benefits provided to the traditional employees were usually absent to them. The new code requires that aggregators should pay between 1-2 percentage of the annual turnover (this must not exceed 5 percent of the amount owed to employees) to a social security fund. This system reorganization guarantees that the companies that are making money with the help of the gig model will become legally responsible towards the well-being of their employees which significantly changes the dynamics of operations of the Indian digital economy.

Read more: Gig Workers’ Rights: Challenges and Solutions

Extending Social Security Benefits

For the workers themselves, this translates into tangible social security benefits. Having signed up on the e-Shram portal, registered eligible gig workers are now available to receive life and disability cover, health and maternity, and accident insurance. The government has also provided a decentralization of grievance redressal that provides some sort of protection against the decision to de-platform at will. By integrating these labour rights India has long needed, the code aims to provide dignity and financial stability to a sector that has become the backbone of urban logistics.

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