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Gig Economy

Posted 22 Aug 2024

Updated 29 Aug 2024

5 min read

Why in the News?

Recently Karnataka government published draft Karnataka Platform-based Gig Workers (Social Security and Welfare) Bill.

An infographic titled "Gig Workers in India (NITI Aayog)" presents data: 7.7 million workers in gig economy (2020-21), 2.6% of nonagricultural workforce or 1.5% of total workforce, and an expected 23.5 million gig workers by 2029-30.

More about the Bill

  • Welfare Board: Provides for establishment of ‘Welfare Board’ at state-level, for securing welfare of Gig-Workers.
  • Establishment of a welfare fund: Consists of welfare fee (Levied on transactions b/w worker & aggregator or on overall turnover of company) & contributions from Union and State governments.
  • Rights-based bill: It seeks to protect the rights of gig workers and places obligations on aggregators in relation to social security, occupational health and safety of workers. 
  • Other Features: Provides safeguards against unfair dismissals, two-level grievance redressal mechanism, and more transparency with regards to automated monitoring and decision-making systems deployed by platforms.
  • Currently, Rajasthan is only state to have legislation for welfare of gig workers.

Issues with Bill

  • Disclosure of algorithmic monitoring and providing reasons for terminations can impact ease of doing business.
  • Bill does not address issue of minimum wages or working hours for gig workers.
  • Welfare board model provides some welfare schemes for gig workers, but it does not replace institutional social security benefits e.g. provident fund, gratuity, or maternity benefits.
  • Unlike Code on Social Security, 2020 (‘COSS’) which defines and regulates both ‘gig workers’ and ‘platform workers’ separately, Bill regulates only subset of platform-based gig-workers.

Gig Workers

  • As per Code on Social Security, 2020, it means a person who performs work or participates in a work arrangement and earns from such activities outside of traditional employer-employee relationship.
  • Broadly classified into 2 categories:
    • Platform based: Whose work is based on online software apps or digital platforms. E.g., delivery workers of Zomato.
    • Non-platform based: Casual wage workers in conventional sectors, working part-time or full-time. E.g., domestic workers.
  • Drivers of Growth: Technological advancements, urbanization, rising middle-class consumption demands, shifts in consumer preferences towards on-demand services, and desire for greater work-life balance among workers.
Flowchart titled "Benefits of a Gig Economy" divided into three sections: Benefits to Workers, Benefits to Employers, and Benefits to Consumers. Each section lists specific benefits in bullet points, such as flexible working hours, cost-effectiveness, and greater convenience.

Challenges for Gig Workers 

  • Digital Divide: Access to internet services and digital technology can be a restrictive factor for workers. 
  • Data protection: Opaque decisions made by platform companies on how to collect; store and share personal data of workers impact Right to privacy of workers.
  • Lacking ‘employee’ status: Has resulted in several consequences e.g. inability to form unions to represent their interests, exploitative contacts, etc.
  • Uncertain Nature of Job: Lack of job security, irregularity of wages, and uncertain employment status for workers. 
  • Lack of social Protection: workers lack safeguards such as Health Insurance, Employees Provident Fund etc.
  • Algorithmic management: Workers face stress due to pressures resulting from algorithmic management practices and performance evaluation on the basis of ratings.

Steps taken for Gig Economy in India

  • Code on Social Security, 2020: Provides for extension of social security benefits to gig workers as well.
  • Code on Wages, 2019: provides for universal minimum wage and floor wage across organized and unorganized sector which include gig workers.
  • e-SHRAM Portal: which is a National Database of Unorganised Workers including gig workers.
  • Pradhan Mantri Suraksha Bima Yojana (PMSBY): All eligible registered unorganised workers including gig workers are entitled to get benefit of an accidental insurance cover of Rs. 2.0 Lakh for a year.
  • The Centre for Labour Studies, National Law School of India University (NLSUI), Bangalore has been engaged for assistance in framing of a new Scheme for the Gig & Platform workers as well as workers in the unorganized Sector.
    • Memorandum of Understanding (MoU) has been signed by Employees Provident Fund Organisation (EPFO) with NLSUI.
Do you know? Employer and Business Membership Organizations (EBMOs): It helps to create the conditions for enterprise success by influencing the environment in which they do business and by providing services that improve their individual performance.

Way Forward

  • Proper Estimation of Gig Workers: By having separate enumeration exercises.
  • Catalyze Platformization: Introducing Platform India initiative (similar to Startup India).
    • This platform can help self-employed individuals to sell their produce to wider markets in towns and cities; Ferrying of passengers for hire etc. 
  • Accelerate Financial Inclusion: Institutional credit to vulnerable section through financial products specifically designed for platform workers by leveraging FinTech industry.
  • Enhancing Social Inclusion in Digital Economy: By enabling different sections of workers e.g. women workers and PwDs to take up employment opportunities in platform sector through skill development, access to finance etc.
  • Skill Development for Platform Jobs: Pursue outcome-based, platform-led models of skilling and job creation.
    • Integrate employment and skill development portals such as E-shram and National Career Services Portals or Udyam portal with ASEEM portal. 
  • Universal Social Security Coverage: By extending social security measures in partnership mode as envisaged in Code on Social Security 2020.
    • Social Security includes paid sick leave, Occupational Disease and work accident Insurance, Retirement/Pension Plans and Other Contingency Benefits etc.
  • Tripartite dialogue: Between governments, platform unions and EBMOs on labour issues & worker well-being in platform economy.

 

  • Tags :
  • Gig Economy
  • Gig Workers
  • Karnataka Platform-based Gig Workers (Social Security and Welfare) Bill
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