Indian employees for Ola, Uber, and Zomato are optimistic about new state legislation.

Indian employees for Ola, Uber, and Zomato are optimistic about new state legislation.

Gig workers in India are rejoicing in what they see to be a little but important success in their continuous quest for improved working conditions and legal protections for their jobs.

The work is difficult, the hours are long, the money is paltry, and there is no job security or access to fundamental rights such as paid leave, insurance, or a pension. The hours are long, the work is difficult, and the pay is little.

However, on July 24th, the western state of Rajasthan approved a historic legislation that, among other aspects, seeks to grant social security benefits to platform-based gig workers. This is a right that platform-based gig workers have been requesting for a considerable amount of time.

The Rajasthan Platform Based Gig Workers (Registration and Welfare) Act 2023 intends to establish a social security fund by charging a welfare tax of 1%-2% on every transaction that a client makes on apps that come within its purview. Some examples of these applications include food delivery and transportation sharing. The fund will also receive donations from individuals who work as gig workers as well as grants from state governments.

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The bill also intends to build an online database of gig workers in the state by registering them and the platforms they are linked with; establish a mechanism to handle their complaints; set up a welfare board to monitor and enforce laws; and levy fines against aggregator platforms that do not comply with the law.

Many people who advocate for workers’ rights have hailed the bill, stating that it would provide gig workers at least some of the protections that those who work in the formal sector have. Additionally, they believe it will serve as an example for other nations to emulate.

However, some claim that the legislation might slow down the growth of the gig economy by causing dissatisfaction among consumers. These clients may wind up paying more for transactions since aggregator platforms may raise rates in order to cover the cost of the welfare tax.

Even in the United States and the United Kingdom, gig workers have begun to unionise in order to seek their rights as employees. Their contemporaries in India have been engaging in the same behaviour since they are exempt from the country’s employment regulations because they are not considered to be “workers” in the traditional sense.

Gig platforms likewise do not refer to themselves as “employers.” Instead, they use the word “aggregators” to describe themselves, and they refer to their employees as “partners” or “independent contractors.” The fact that gig workers do not get a cut of the earnings yet are nonetheless required to abide by the restrictions established by the platform is considered unfair by many specialists.

According to the research carried out by the government-sponsored think tank Niti Aayog, the number of platform-based gig workers in India is far more than seven million. However, specialists believe that this figure understates the true extent of the problem. As a result of the growing population in the nation, there are no significant gaps in the labour market, which has driven many people, particularly younger people, to seek employment in the gig economy.

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The Act, according to Akriti Bhatia, an activist for workers’ rights, is “important” because it places a primary emphasis on the registration of gig workers, which is the first step towards including them in the social security net. “It also makes data visible, including the financial transactions of applications, and this might prevent platforms from participating in unfair practises,” she says. Examples of such practices include removing a rider’s data or imposing arbitrary penalties.

According to Nikhil Dey, a member of a workers’ rights organisation that was a driving force behind the development of the bill, the newly enacted legislation offers a method for employees to organise themselves by providing them with representation in the form of a welfare board. In addition to this, it presents a novel approach to the process of accumulating and distributing money for social security.

Every independent contractor who signs up for the database and complies with the legislation will get a one-of-a-kind identification number. This number will not change no matter which platform the worker chooses to work for, and it will continue to be valid indefinitely. An integrated monitoring and financial management system allows workers to use this ID to verify their earnings across all platforms.

If a driver completes two trips with Ola and four journeys with Uber on the same day, for instance, he will be able to monitor his earnings across both platforms by using the ID. According to Mr Dey, “This method makes it simple for employees and the board to examine who stands to receive how much in social security, based on their wages.” “This system makes it easy for workers and the board to assess who stands to get how much in social security,”

The nature of gig labour is not stable, and as a result, a worker may transition to a different business and remain there permanently; or they may return to gig work after a few months or years away from it. According to Mr Dey, in such a circumstance, an individual has the option to keep making contributions to the fund in order to reap the advantages after the fund has reached its maturity.

“It was a deliberate choice not to fight for regulation but to find a method to implement something everyone agrees on – even aggregator platforms believe that gig workers should receive social security,” he continues. “It was important to find a way to implement something everyone agrees on.”

According to the opinions of several experts, the Act solves a number of the issues that plagued earlier attempts to provide social security benefits to employees.

On the other hand, a number of specialists have pointed out that the new legislation does not address more serious concerns about labour rights, such as a limit on the maximum number of work hours or a minimum wage. They also believe that there has to be greater clarification on how the welfare tax is going to be deducted so that it is not withdrawn from the employees’ incentives or made up via penalties, and they add that this clarity needs to be provided as soon as possible.

Nilanjan Banik, a professor of economics and finance at Mahindra University, thinks that it won’t be possible to evaluate the efficacy of the bill until after it has been put into effect.

On the other hand, according to Ms Bhatia, if there is sufficient political will, putting the legislation into effect shouldn’t be difficult. She also mentions that it offers a road map for the establishment of comparable legislation across states and for various occupations in the unorganised sector of the economy.

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There has been a shift towards legislators and governments being more receptive to the needs of gig workers; the organisations that speak on their behalf assert that this is because gig workers constitute a substantial vote bank.

The Code on Social Security was approved by the federal government in 2020, and it mandates that gig economy platforms make contributions to a fund for their employees. However, the guidelines for how these contributions should be made have not yet been established. The government of Karnataka made an announcement in July stating that it would give free accidental and life insurance cover of 400,000 rupees ($4,827; £3,790) to gig workers and that the state would pay the yearly payment for the coverage.

Just a few short months before the assembly elections that are scheduled to take place in Rajasthan, the administration that is headed by the Congress party managed to get the new legislation enacted.

According to Shaik Salauddin, a head of the labour union who participated in negotiations with the government about the law, gig workers would continue to exert pressure on governments in order to get their rights. “Parties across the spectrum have understood our potential as a vote bank, and they can’t ignore us anymore,” he adds. “We are a vote bank that they can no longer ignore.”

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