Code on Social Security for gig workers awaits implementation three years after proposal 

The Code on Social Security, ratified three years ago by The Ministry of Labour & Employment in September 2020, is yet to be enforced, and the government is still taking feedback on the proposal from stakeholders. 

Rameshwar Teli, the Minister of State for Labour and Employment informed Members of Parliament in the Rajya Sabha that "the Centre has solicited feedback and proposals from various stakeholders on the code."

He was answering a question as part of the Winter session of Parliament, as to whether the government had implemented any of the Standing Committee Labour's recommendations for gig workers. 

The Centre for Labour Studies, National Law School of India University (NLSUI), Bangalore, has been hired to assist in the establishment of a new Scheme for Gig and Platform workers, as well as workers in the unorganised sector.

The Code on Social Security introduced in 2020, defined for the first time a ‘gig worker’ and ‘platform worker’ and offered framing of suitable social security schemes for gig workers and platform workers on matters relating to life and disability cover, accident insurance, health and maternity benefits, old age protection, etc.

It derives its provisions from nine worker welfare and rights legislation, including 'The Employees Compensation Act, The Employees State Insurance Act, The Maternity Benefit Act, The Building and Other Construction Workers Cess Act, and The Unorganised Workers' Social Security Act'.

The Code also provides for the establishment of a Social Security Fund. Contributions from aggregators and platforms equivalent to 1 to 2% of yearly turnover are one funding source, with a cap of 5% of the amount paid or receivable by an aggregator to such workers.

According to ASSOCHAM, India's gig economy is expanding at a 17 percent CAGR. Almost 60 percent of software organisations are now investing in gig workers, and 97% of these companies intend to keep gig workers at their present level or hire more freelance workers. 

According to a recent Boston Consulting Group analysis, the gig economy has the potential to serve up to 90 million jobs in India's non-farm economy alone, transact over $250 billion in work volume, and contribute an additional 1.25 percent to GDP over time. 

"In reality, there is no welfare plan expressly for gig workers because any such scheme notified by the Centre for gig and platform workers would have to be entirely supported by the Centre or rely on state assistance," said a senior government official in the know of the developments in the Labour Ministry.

While there is an opportunity for aggregators to take on this willingly, with aggregator contributions or any other combination, the truth is that both the private sector and the government haven't yet taken this up seriously, a top official from the Ministry of Employment and Labour, said explaining why the plan has taken three years to become a reality.