Govt defines gig workers, underlines welfare fund for unorganised labourers

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The Union government on December 20 said it has defined gig workers, but not gig economy. It also underlined that a welfare fund for gig and platform workers is on the anvil with contribution from related companies.

The Code on Social Security recognises gig workers as a new occupational category and where there is no traditional employee and employer relationship.

“It defines the gig worker as a person who performs work or participates in work arrangement and earns from such activities, outside of the traditional employer-employee relationship,” the Union labour ministry informed Parliament on Monday.

The ministry defined a platform worker as “a person engaged in or undertaking platform work”. It, however, said that the code that envisages various welfare benefits for platform and gig workers, but “does not define gig economy”.

To be sure, none of the four codes – on wages, social security, industrial code, and occupational safety – has come into effect despite being passed by Parliament more than a year back. This is due to several reasons such as slow pace of rule framing, reservation on some of the provisions by both employers and employees, and the upcoming Assembly elections in key states.

“The code envisages various benefits for gig workers, including life and disability cover, accident insurance, health and maternity, old age protection, creche and other benefits,” the labour ministry said.

So far, 727,927 gig workers have registered with the government’s ‘e-shram’ portal, the informal database established by the government and allowed registration since the last week of August.

All eligible registered unorganised workers, including gig workers, are entitled to get benefit of an accidental insurance cover of Rs 2 lakh for a year free of cost through the Pradhan Mantri Suraksha Bima Yojana (PMSBY).

On payment of wages, the government said the Code on Wages, 2019, provides for universal minimum wage and floor wage across organised and unorganised sectors which include gig workers.

“It, inter alia, provides for fixation of minimum rate wages on a time work basis with any one or more wage periods, namely by the hour, by the day, or by the month. Besides, the code mandates the government to fix the floor wage applicable across the central and the state spheres.”

The labour and employment ministry reiterated that a Social Security Fund has also been planned and one of the sources of fund, is contribution from aggregator between 1 percent and 2 percent of its annual turnover, subject to the limit of 5 percent of the amount paid or payable by an aggregator to such workers, it said.

The ministry, however, underlined that no scheme has been finalised as the provisions under the code relating to gig and platform worker have not come into force.