The Ministry of State for Labour and Employment recently informed the Lok Sabha about the introduction of the terms ‘gig worker’ and ‘platform worker’ to the ‘Code on Social Security (SS), 2020’. This is the first time these categories have been officially defined in Indian law.
Provisions of the Social Security Code, 2020
The Code’s goal is to regulate different sectors, whether organized or unorganized, and offer social security benefits like sickness, maternity, disability coverage to all employees. It integrates nine previous labour laws related to social security into one unified code.
It incorporates acts like the Employees Compensation Act, 1923; Employees State Insurance Act, 1948; Employees Provident Fund, Miscellaneous Provisions Act, 1952, and others. The Code also expands its scope to include unorganized sector workers, fixed-term employees, gig workers, platform workers, inter-state migrant workers, and contract employees.
New Definitions Under the Code
In this code, the term ‘employee’ now encapsulates contract workers as well. The definition of inter-state migrant workers has been expanded to include self-employed workers migrating from other states. Gig workers are defined as freelancers, independent contractors, and others who engage in temporary or hourly work without a traditional employer-employee relationship. Workers connecting with their customers via an app or website are classified as platform workers. The digitalisation of data is emphasized with the requirement for maintaining electronic records to facilitate governance and compliance.
Benefits and Penalties Associated with the Code
Maternity benefits apply to establishments employing 10 workers or more, leaving out women in the unorganised sector. Violation of the Code’s provisions can lead to severe penalties, including a fine of Rs 100,000 and imprisonment ranging from one to three years.
Concerns Regarding the Social Security Code
Critics argue that social security benefits remain fragmented and are administered by multiple bodies which can make accessing them confusing for workers. The Code also has establishment size thresholds for mandating certain benefits, leaving out a significant number of workers.
Status of the Gig Economy in India
In a rapidly growing gig economy, temporary and part-time positions filled by independent contractors and freelancers are replacing full-time permanent employees. India’s gig workforce has 15 million workers across sectors like software, shared services, and professional services, according to reports by the Boston Consulting Group and the International Labour Organization.
Growth Drivers and Challenges of the Gig Economy
Factors like the rise of internet and mobile technology, economic liberalisation, and demand for flexible work have contributed to the growth of the gig economy. However, challenges like lack of job security, irregular wages, uncertain employment status, stress due to income unpredictability and limited access to the internet pose barriers.
Impact of Gig Economy on Women
The gig economy offers potential benefits for women by offering part-time, flexible working hours that can be balanced with traditional roles. It provides on-demand work, allowing women to join and drop out of the workforce at will. Furthermore, it can boost their confidence by providing extra income and decision-making power, essential components of women empowerment.
Way Forward
While the SS Code 2020 attempts to bring informal workers under social security, it doesn’t fully achieve its goal of universal social security. As India faces an ageing population without proper social security, the current workforce won’t be able to support it in the future.
Therefore, more measures should be undertaken to provide social security, which can help formalize the workforce. Employers, who benefit from their workers’ productivity, should shoulder the primary responsibility for providing social security.
While the gig economy presents opportunities for individual livelihood and work flexibility, better regulation and protections for gig workers are needed in India.
