Rajasthan Gig Workers Bill: Penalties Up To INR 50 Lakh Proposed For Violating Aggregators

Rajasthan Gig Workers Bill: Penalties Up To INR 50 Lakh Proposed For Violating Aggregators


With the introduction of the Bill, Rajasthan has become the first state in India to propose legislation to protect the rights and welfare of gig workers

The Bill aims to address the uncertain legal status of app-based gig workers and make them eligible for various state welfare programs

Aggregators will be liable for a welfare cess in the range of 1-2% which will be deposited in the proposed fund to be used for workers’ welfare

The recently-unveiled ‘The Rajasthan Platform Based Gig Workers (Registration And Welfare) Bill, 2023’ by the Rajasthan government has proposed making aggregators liable for fines up to INR 50 Lakh for flouting norms.

With this Bill, Rajasthan has become the first state to propose a law to safeguard the rights of gig workers and bring them under the ambit of various welfare programs.

It is pertinent to note that workers such as transport drivers, food delivery agents, and others are not formally employed by any aggregator platforms and as such their legal status as labourers remains uncertain. The platform economy facilitates flexible work but not everyone benefits equitably, according to critics.

First contravention of the norms of the Bill will result in a levy of a fine of up to INR 5 Lakh on aggregators, as per the Bill. This can go up to INR 50 Lakh for subsequent violations. On similar lines, companies, other than aggregators, employing gig workers will be liable for a penalty of INR 10,000 for the first contravention and up to INR 2 Lakh for further violations. 

The government has also proposed a ‘welfare cess’ that will be imposed on aggregators or primary employers in the range of 1-2% of the value of each transaction undertaken by gig workers. The money collected from the cess will go towards establishing a fund (called The Rajasthan Platform Based Gig Workers Social Security and Welfare Fund) to be utilised for the benefit of gig workers.

According to the proposed legislation, the state administration also intends to establish a welfare commission to register platform-based contract employees and their aggregators. The welfare board will include representatives from gig workers’ unions, aggregators, and civil society members. The commission will also serve as an appellate tribunal to hear complaints from gig workers, oversee all payments made on platforms, and penalise aggregators.

The welfare fund will be seeded with INR 200 Cr by the state government to kick off operations in the state. 

In addition to providing gratuities, scholarships, and pensions, the board will formulate schemes for the benefit of gig workers, provide them with immediate financial assistance in the event of accidents or medical emergencies, and offer them health insurance coverage under state government programs.

The Bill mandates all aggregators to forward the information of all gig workers onboarded by them. Once the information is received, the workers will automatically be registered with the board, which shall maintain a database of workers in the state. In addition, it will also create a unique ID for every gig worker in the state and the registration ‘shall be valid in perpetuity’.

“All platform-based gig workers registered with any platform shall be automatically registered with the board irrespective of the duration of their engagement with the platform. The board shall generate a unique ID for every platform-based gig worker registered with one or more aggregators in the State,” the Bill states.

The draft also specifies that the information of all registered contract employees be maintained in a publicly accessible database.

The full-fledged Bill comes four months after Rajasthan Chief Minister Ashok Gehlot, in his Budget speech, hinted at formation of laws to regulate the gig economy in the state. The development comes as the state prepares to go to polls in the next few months. 

The Troubled Gig Ecosystem

A sizable chunk of voters in the state are gig workers. The state government estimates that there are between 22.5 Lakh to 27 Lakh gig workers in Rajasthan, with approximately 50,000 employed by Ola and 35,000 by Uber. 

Pan-India, the number is much higher. According to a report published by NITI Aayog in July 2022, approximately 77 Lakh individuals were employed as gig workers at the end of June 2022. The number was projected to triple to 2.3 Cr by 2029–2030. 

The new proposed regulations have been prompted by a rise in cases of protests involving gig workers seeking better wages and working conditions. Recently, a group of beautician partners protested at the Gurugram office of Urban Company to flag multiple issues. 

Foodtech platforms Zomato and Swiggy have regularly been embroiled in protest by employees seeking better salaries. Aggregator platforms have also not generally fared well on various gig workers-focussed indices, pointing to the plaguing issues within the ecosystem. 

With the government expected to see some resistance from gig workers, it remains to be seen if the government goes ahead with the legislation before the model code of conduct goes into effect. If the Bill is passed by the state assembly, enforcement of rules could put the aggregators, which already account for millions of dollars in losses, in a fix. 

Despite the challenges, the homegrown gig worker economy is slated for a mega boom in the year forward and is projected to grow to a market size of $455 Bn by 2024.

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