India Plans To Extend State Employee Benefits To Gig Economy Workers

In a bid to provide retirement and insurance benefits to those employed in the gig economy such as those working for ride-hailing, delivery and other app-based services, the Indian government is planning to extend the worker benefits under the state-run Employees’ State Insurance Corporation (ESIC).

This includes delivery partners working with delivery startups such as Zomato, Swiggy, BigBasket, Dunzo, Grofers, UberEats and others as well as driver partners for Ola, Uber, Rapido and other mobility startups.

According to a Business Standard report, the inclusion of gig economy workers in the ESIC offered programmes is a part of government’s Social Security Code Bill which received a nod from the union cabinet on Wednesday, before being tabled in the Parliament. Notably, this is the first time that gig economy workers are going to get benefits provided by the ESIC.

In laymen terms, the term gig economy refers to a workforce ecosystem built around short-term projects, temporary contracts and independent work largely for tech companies and startups. For individuals that do not have the right skills for the formal sector, the gig economy has come as a great respite, however, the working conditions, pay scale and constant pressure to deliver higher targets to get incentives has brought gig economy worker issues to the fore.

Gig workers, affiliated with online platforms, have repeatedly complained of irregular working hours, deviation from labour contracts and poor health coverage, among other issues. However, the new norms laid out under this bill are likely to address some of these issues.

While the central government is planning to extend the ESIC services to gig workers, the Karnataka government is working to formulate policies to ensure better working conditions of gig workers in the state.

Worker Benefits For The Gig Economy

The proposed draft also ensures gratuity perks for fixed-term contract workers before completing five years of service. Notably, these workers will receive a gratuity bonus proportional to the time of their service at the company.

This proposal will enable fixed-term workers to enjoy almost the same benefits received by permanent workers. Currently, any employee working in an Indian registered company has to complete five years of service to receive gratuity bonus, according to the provisions of the Payment of Gratuity Act, 1972.

While the law doesn’t make any discrimination between casual, contractual, temporary or permanent workers who have completed five years of continuous, yet establishments have kept contractual employees void of this bonus.