Gig Economy Workers and the Code on Social Security: Legal Landscape and Implications
- ByAdmin --
- 23 May 2025 --
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The gig economy — characterized by flexible, short-term, and freelance work facilitated through digital platforms — has transformed India’s labor market. With millions engaged in app-based jobs like ride-sharing, food delivery, freelance services, and more, the question of social security for gig workers has become urgent. Recognizing this, the Indian government introduced the Code on Social Security, 2020, aiming to extend social security benefits to unorganized, gig, and platform workers for the first time under a single legal framework.
Understanding the Gig Economy and Its Challenges
- Gig workers typically operate without fixed employment contracts, social security benefits, or legal protections.
- Their income is often irregular, and they face uncertainty regarding work availability, health risks, and lack of workplace protections.
- The traditional labor laws did not explicitly cover gig and platform workers, leaving a gap in social security coverage.
The Code on Social Security, 2020: Key Provisions for Gig Workers
1. Definition and Coverage
- The Code explicitly defines “gig workers” as those engaged in work arrangements outside traditional employment, facilitated by digital platforms.
- It also includes platform workers, broadening the scope of coverage.
- These workers are recognized as distinct from formal employees, acknowledging their unique work arrangements.
2. Social Security Schemes
- The government is empowered to notify schemes specifically for gig and platform workers.
- These may include life and disability cover, health and maternity benefits, provident fund, pension, and skill development programs.
- Contributions may be shared between the government, platform companies, and workers themselves.
3. Registration and Database
- The Code mandates the creation of a National Database of Unorganized Workers (NDUW).
- Gig workers are required to register to access social security benefits.
- The database aims to streamline benefit delivery and policy implementation.
4. Role of Platform Companies
- While platform companies are not considered employers in the traditional sense, the Code contemplates their participation in contributing to social security schemes.
- This marks a shift towards shared responsibility between the state, platforms, and workers.
Legal and Practical Implications
- Extension of social security benefits is a landmark recognition of gig work as legitimate employment activity deserving protection.
- However, enforcement challenges remain, including ensuring registration, timely contribution, and benefit disbursement.
- The ambiguous role of platform companies raises questions about the extent of their liability and cooperation.
- Gig workers’ lack of awareness and digital literacy may hinder uptake of benefits.
Judicial and Policy Perspectives
- The Supreme Court and various tribunals have, in different cases, highlighted the need to protect gig workers, recognizing their economic contributions and vulnerabilities.
- The Code aligns with the International Labour Organization (ILO) recommendations on decent work and social protection for non-standard workers.
- Policymakers stress the importance of capacity building, outreach, and simplifying registration processes.
Challenges Ahead
- Defining the exact nature of the gig work relationship and the role of platforms remains complex.
- Ensuring universal and equitable coverage without overburdening gig workers or platforms.
- Creating effective grievance redressal mechanisms and dispute resolution tailored for gig workers.
- Integrating social security schemes with other welfare programs to avoid duplication and maximize impact.
Conclusion
The Code on Social Security, 2020 is a progressive step toward bridging the social security gap for India’s gig economy workforce. While legal recognition and policy frameworks are in place, effective implementation, awareness, and cooperation between the government, platforms, and workers are critical to realizing its full promise. As the gig economy continues to grow, India’s legal system must adapt continuously to protect the rights and welfare of this dynamic and vital segment of the labor force.
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