Draft Code On Social Security: Benefits For Gig Economy, Unorganised Sector Employees And More

According to the Oxford Internet Institute’s ‘Online Labor Index’, India leads the global gig economy with a 24% share of the online labour market, with demand for software developers, creative and marketing professionals. The continued growth prospects and the increasing reliance on gig workers have now caught the attention of the government as well.

In simple terms, “gig economy” refers to a general workforce environment in which short-term engagements, temporary contracts, and independent contracting is commonplace.

The Ministry of Labour and Employment has now introduced The Code On Social Security, 2019, which says, “central government shall formulate and notify, from time to time, suitable welfare schemes for unorganised workers on matters relating to life and disability cover, health and maternity benefits, old age protection, and any other benefit as may be determined by the central government.”

The draft code is expected to merge with eight existing laws. In a nutshell, the draft code suggests that along with the central government, states may also formulate schemes for unorganised sector employees for offering them provident fund, employment injury benefit, housing benefit, educational schemes for their children and old age and funeral assistance.

In 2017 EY’s Future of Jobs in India study showcased that 24% of the world’s gig workers hail from the country. According to Intuit estimates, gig economy workers will represent 43% of the total workforce in India by 2020.

In this light, the universal social security benefits are expected to support the segment in finding a growth roadmap and find support. The impact is expected to be massive as the gig workers find more opportunities in the startup’s job market.

Here are a few benefits lined up for gig workers and the unorganised sector:

• The Central Government shall, by notification, constitute a National Social Security Board for unorganised workers.
•  The Central Government may, by notification, constitute the Central Advisory Committee for Unorganised Workers in respect of such schemes as it deems fit, to advise the Central Government on such matters arising out of the administration of this Code relating to unorganised workers or such schemes for which the Advisory Committee is constituted, and such other matters that the Central Government may refer to it for advice.
• The State Government may formulate and notify, from time to time, suitable welfare schemes for unorganised workers, including schemes relating to- provident fund; employment injury benefit; housing; educational schemes for children; skill upgrade of workers; funeral assistance; and Old age homes
• The Central government or the state government may set-up such workers facilitation centres as may be considered necessary from time to time to perform the following functions, namely disseminate information on available social security schemes for the unorganised workers; facilitate filling, processing and forwarding of application forms for registration of unorganised workers, etc

The draft social security code is open for public comments till October 25, 2019. You can check out the details here.