Gig Workers Rights Bill

CONTEXT: Rajasthan government passed the Rajasthan platform based gig workers (Registration and welfare ) Bill

WHO ARE GIG WORKERS?

• Non-standard or gig work consists of income-earning activities outside of the standard, long-term employer-employee relationships.
• A gig economy is a labor market that relies heavily on temporary and part-time positions filled by independent contractors and freelancers rather than full-time permanent employees.
• The term is borrowed from the music world, where performers book “gigs” that are single or short-term engagements at various venues.
• The gig economy uses digital platforms to connect freelancers with customers to provide short-term services or asset-sharing.
• Examples include ride-hailing apps, food delivery apps, and holiday rental apps.

PROVISIONS OF THE BILL

• Extension of Rights to Gig Workers: The Bill extends certain “rights” to gig workers, including registration with the state, access to general and specific social security schemes, and the right to be heard for grievances.
• Platform-Based Gig Workers Welfare Board: The law establishes a Welfare Board specifically for platform-based gig workers. The board will consist of bureaucrats and representatives from both gig workers and aggregators, nominated by the state government.
• Registration Requirement: The Bill mandates the registration of all gig workers and aggregators operating in the state.
• Unique ID for Gig Workers: The state government will create a database of gig workers and generate a unique ID for each worker.
• Platform-Based Gig Workers Fund and Welfare Fee: A social security and welfare fund will be established for gig workers. A fee will be levied on aggregators, based on a percentage of the value of each transaction involving a platform-based gig worker. The specific rate of the fee will be notified by the state government.
• Penalties for Non-compliance: Aggregators failing to pay the welfare fee on time will be penalized with an interest of 12 percent per annum from the due date. The state government is empowered to impose fines for violations of the Act by aggregators.

CRITICISMS OF THE BILL

• Limited Coverage: Bill’s coverage limited to platform-based gig workers and might not extend to other types of informal or gig economy workers who do not fall under the “platform” category.
• Enforcement and Implementation: Concerns raised about the enforcement of the bill’s provisions, particularly in cases where aggregators fail to comply with the payment of welfare fees or other requirements.
• Fee Impact on Aggregators: Impact of levying fees on aggregators for each transaction involving gig workers. There could be concerns about how this might affect the business models of aggregators and potentially lead to increased costs for consumers.
• Exclusion of Traditional Labor Protections: While the bill provides certain rights and social security measures, gig workers might still lack some of the traditional labor protections that formal employees enjoy.
• Clarity on Grievance Redressal: Clarity and effectiveness of the grievance redressal mechanisms outlined in the legislation.
• Representation of Gig Workers: The representation might not be sufficient to truly reflect the interests and concerns of gig workers.
• Financial Viability: Critics might raise questions about the financial viability of the social security and welfare fund, including concerns about its sustainability and ability to provide meaningful support to gig workers over the long term.
• Impact on Business Models: There could be concerns about how the provisions of the bill might impact the flexibility and business models of gig platforms, potentially leading to changes in how they operate.
• Monitoring and Oversight: Need for strong monitoring and oversight mechanisms to ensure that the welfare fund is being utilized effectively and that the intended benefits reach gig workers.

NITI AAYOG’S ‘INDIA’S BLOOMING GIG AND PLATFORM ECONOMY’REPORT

• In the financial year 2020–21, an estimated 7.7 million workers were engaged in the gig economy in India.
• The gig workforce accounted for 6% of the non-agricultural workforce or 1.5% of the total workforce in the country.
• Projections indicate that the gig workforce is expected to grow to 23.5 million workers by the financial year 2029–30.
• By 2029–30, gig workers are projected to comprise 6.7% of the non-agricultural workforce or 4.1% of the total workforce in India.
• Currently, around 47% of gig work is in medium-skilled jobs, about 22% in high-skilled jobs, and approximately 31% in low-skilled jobs.
• The trend suggests that the concentration of workers in medium-skilled jobs is gradually declining, while the proportion of workers in low-skilled and high-skilled jobs is increasing.

CHALLENGES FACED BY GIG WORKERS IN INDIA

• Lack of Worker Rights: Gig workers, defined as individuals who perform work outside of traditional employer-employee relationships, lack fundamental rights such as health insurance, paid leave, job security, and legally binding contracts.
• Vulnerability: Despite working long hours, gig workers are treated as consultants or freelancers, which can lead to the denial of crucial benefits and protections. This leaves them vulnerable to exploitation and precarious working conditions.
• No Responsibility by Companies: App-based platforms often label gig workers as ‘partners’ or ‘delivery executives’ and do not acknowledge them as formal employees. This allows companies to evade responsibility for workers’ rights and violations.
• Insufficient Protections: While the Social Security Code of 2020 recognized gig workers under the umbrella of social security, it did not mandate specific protection measures for these workers.
• Inequality and Discrimination: Gig work can be grueling and exclusionary, favoring those who own vehicles and smartphones. Women, in particular, might face challenges due to limited access to these resources.
• Incentive-Driven Payments: Gig workers’ earnings are often incentive-driven, encouraging them to work longer hours and follow stipulated rules to qualify for incentives. This can lead to overworking and sacrificing personal well-being.
• Hidden Costs: Workers bear hidden costs, including mobile phone expenses, data usage, vehicle maintenance, and fuel costs, without receiving adequate support from the companies.
• Lack of Recognition: Gig workers’ unions are not officially recognized by companies or the government, leaving them with little bargaining power and limited influence in improving their working conditions.
• Unionization Efforts: Despite challenges, some unions and federations have emerged among gig workers, advocating for improved conditions, recognition, and better treatment.
• Hope for Change: While there are protests and discussions around gig workers’ rights, there is a need for concrete legal measures and public discourse to create meaningful change in the sector.

RECOMMENDATIONS OF NITI AAYOG

• Accelerating Access to Finance: Develop financial products specifically tailored for platform workers to facilitate easier access to financial services.
• Linking Self-Employed Individuals: Connect self-employed individuals, such as those involved in selling regional and rural cuisine or street food, with platforms that enable them to reach wider markets in urban areas.
• Platform-Led Skill Enhancement: Implement platform-led skilling initiatives that focus on transformational and outcome-based skill development for gig workers.
• Enhancing Social Inclusion: Conduct gender sensitization and accessibility awareness programs for gig workers and their families to enhance social inclusion.
• Extending Social Security Measures: Collaborate with platforms to extend social security measures to gig workers in a partnership mode, as outlined in the Code on Social Security 2020.
• Enumeration Exercise: Undertake a separate enumeration exercise to accurately estimate the size of the gig and platform workforce.
• Collect Data During Official Enumerations: During official enumerations such as the Periodic Labour Force Survey, collect information to identify gig workers and gather relevant data about their employment.