Aggregators Feel The Heat As Centre Notifies Four Labour Codes

In a major reform, the Union government yesterday notified all four labour codes, which officially introduce new protections for India’s gig workers. The new rules will come into effect immediately.

Rationalising India’s 29 existing labour laws, the new norms, for the first time, officially recognise and define gig workers, platform workers and aggregators. With this, online platforms have now come under the ambit of the country’s labour laws. 

Not just this, the new laws also mandate online aggregators and marketplaces, from Swiggy and Zomato to Amazon and Flipkart, to allocate 1-2% of their annual turnover for the welfare of gig workers. This number had been capped at 5% of the amount paid or payable to gig and platform workers.

Alongside, the new labour laws also pave the way for setting up a dedicated fund to finance schemes for gig, and platform workers. This corpus will cover life, disability, health, and old-age benefits for these workers. “The amount collected through the compounding of offences will be credited to this fund and used by the government,” said the Centre.

Compounding an offence refers to a legal process, whereby a company offers to pay a penalty to the government in exchange for charges to be dropped and prosecution being avoided. 

Under the new framework, first-time offences, punishable with fines, are compoundable (compounding penalty stands at 50% of maximum penalty for fine-only cases, while 75% will be levied for cases involving both fine and imprisonment).

The new norms also put the onus of ensuring social security coverage on online aggregators and platforms, including benefits such as provident fund, coverage under insurance, among others. “Aadhaar-linked universal account number (UAN) will make welfare benefits easy to access, fully portable, and available across states, regardless of migration,” added an official press release.

Under the new labour laws, all workers will be entitled to minimum wages, salary credit by the seventh of every month, double wages for overtime and mandatory appointment letters. The new norms also envisage free annual health check-ups for workers, while fixed-term employees will be eligible for gratuity after one year of continuous service.

Welcoming the implementation of the four labour codes, Prime Minister Narendra Modi said that the reforms will build a future-ready ecosystem that will protect the rights of workers and strengthen India’s economic growth. 

“Today, our Government has given effect to the Four Labour Codes. It is one of the most comprehensive and progressive labour-oriented reforms since Independence. It greatly empowers our workers. It also significantly simplifies compliance and promotes Ease of Doing Business,” said PM Modi. 

Chiming in, home minister Amit Shah, in a post on X, said that the new labour codes guarantee minimum wages, social security and legal recognition for gig and unorganised workers.

That said, the new labour codes are expected to increase compliance burdens for online aggregators and put additional strain on their finances. 

The development comes days after Telangana Cabinet also reportedly approved the draft Telangana Gig and Platform Workers (Registration, Social Security and Welfare) Act, 2025, which paves the way for setting up of a welfare fund and a grievance redressal framework.

At the heart of all this is India’s growing gig economy, which is reportedly projected to account for 2.35 Cr workers by FY30. This has been driven by factors like smartphone penetration and urbanisation, but faces headwinds like low wages, job insecurity, and a lack of formal protections.