In India many individuals enter the gig economy to fulfill family financial obligations, with 30 per ent of gig workers citing the need to meet family expectations as their primary motivation. For some, gig work is their only earning mode, accounting for 20 per cent of participants, while another 20 per cent view it as a way to supplement their primary income through extra earnings. The autonomy and control over schedules and workload attract 10 per cent of gig workers who value independence. Additionally, earning while studying is another significant factor, with 20 per cent of workers engaging in gig work to balance their education and financial needs.
Lack of Job and Social Security Many gig workers in India are not covered by Labour codes and do not have access to benefits such as health insurance and retirement plans. They do not receive the same level of protection as traditional employees in the event of injury or illness. The gig economy heavily relies on technology and internet access, this creates a barrier for those who lack access to these resources, and further exacerbates income inequality. There is a lack of data and research on the gig economy in India which makes it difficult for policymakers to understand its size, scope, and impact on the economy and workforce. The Gig workers in India are often paid less than traditional employees and may not have the same legal protections. Some companies may also exploit gig workers by misclassifying them as independent contractors to avoid liability and avoid paying taxes.
Despite these benefits, gig workers face several challenges. A significant concern is the lack of health insurance, affecting 40 per cent of workers who struggle with financial strain due to medical expenses. Fundamental worker rights, including minimum wage, are absent for 20 per cent of gig workers, highlighting the lack of basic protections. Legal safeguards are also insufficient, leaving 15 per cent of workers exposed to exploitation and unfair treatment. The absence of family benefits, such as group personal insurance and group term life insurance, affects 10 per cent of workers, further destabilising their livelihoods. Moreover, 15 per cent of gig workers face limited opportunities for skill enhancement, restricting their potential for career advancement.
Worker Rights
The gig workers should have access to social security programs such as pension schemes and health insurance to ensure financial security for older workers and hence, they need to be covered under social security programs/regulations. They should be granted the same Labour rights as traditional employees, including the right to organize and form unions. The government should invest in education and training programs for gig workers to improve their skills and increase their earning potential. The Government & Enterprises should encourage fair competition by having regulations that prevent companies from misclassifying workers as independent contractors and by enforcing fair trade practices.
To address these issues, several support measures have been proposed. Structured work and performance benefits can enhance job satisfaction and financial security for gig workers by creating clear job performance guidelines. Implementing regulations to protect workers’ rights, including fair wages and safe working conditions, is crucial. Providing standard health benefits would address one of the most critical concerns faced by gig workers, while offering family benefits, such as group personal insurance and group term life insurance, would provide greater security. Developing structured skill enhancement programs would enable gig workers to improve their competencies and unlock better income opportunities.
Legal Protections
The regulatory framework governing the gig economy in India is gradually evolving to address these challenges. The introduction of the Code on Social Security, aimed at extending social security benefits to gig workers, marks a significant step forward. While the Code falls short of providing all benefits accorded to traditional employees, such as gratuity and employee provident fund, it lays the groundwork for state-specific rules and welfare schemes tailored to the needs of gig workers. The Contract Labour (Regulation and Abolition) Act, 1970 tries to provide scope for platform workers, by extending the definition of contract Labour to encompass platform Labour as well. But this extension is not something the legal system has recognised considering the various "platforms" do not extend benefits guaranteed to contract labourer's.
Legal precedents and ongoing litigation highlight the efforts of gig workers to secure recognition and protections under existing laws. The case of All India Gig Workers Union v. Uber India Systems Pt. Ltd. exemplifies this struggle, where gig workers have contested Uber's classification practices and demanded fair compensation and social security benefits.
The regulatory framework governing the gig economy in India is gradually evolving to address these challenges. The introduction of the Code on Social Security, aimed at extending social security benefits to gig workers, marks a significant step forward. While the Code falls short of providing all benefits accorded to traditional employees, such as gratuity and employee provident fund, it lays the groundwork for state-specific rules and welfare schemes tailored to the needs of gig workers.
(The article above has been curated exclusively for BW People publication by Sudeep Sen, Vice President, GI Group Holding)
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