Platform companies may hike fees; formal staffing firms seen benefiting as labour codes take effect

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India’s long-delayed labour law overhaul has finally moved into implementation, and early analysis points to a clear divergence in impact: gig-economy platforms are likely to pass on higher statutory costs to customers, while formal staffing companies may benefit as compliance becomes more centralised and predictable.

A new report by Kotak Institutional Equities estimates that gig-economy aggregators such as Swiggy and Zomato (referred to as “Eternal” in the note) may face a statutory contribution of 1 to 2% of annual turnover, capped at 5% of total payments to gig workers, towards a government-run social-security fund.

If the maximum 5% cap is applied, the incremental hit works out to Rs 3.2 per food-delivery order and Rs 2.4 per quick-commerce order, the note mentioned. Further, the brokerage expects the additional burden to be passed on to consumers over time, through higher platform fees or new levies.

Kotak believes these platforms will eventually pass on the cost to users, either through higher platform fees, surge-linked charges or reworked delivery pricing.

Platforms already offer accident insurance, health insurance, loss-of-pay cover and maternity benefits. If the government requires these to be routed through a central corpus, Kotak said the actual net incremental impact may narrow to Rs 1–2 per order.

Staffing firms may emerge as medium-term beneficiaries

Organised staffing companies stand to gain from simplified and unified compliance requirements, according to Kotak. With easier labour norms and clearer codification, employers may increasingly move towards formal staffing platforms, aiding firms such as TeamLease.

Even as the codes broaden social-security protection, the rollout will be operationally challenging. Gig workers often have non-standard hours, high attrition and multi-platform participation, complicating attribution of benefits. The government’s e-Shram database is expected to play a key role in tracking and delivering entitlements.

The government notified the implementation of the four major labour codes — on Wages, Industrial Relations, Social Security and Occupational Safety — with effect from November 21. Together, the codes consolidate 29 existing laws and bring gig and platform workers under a formal social-security architecture for the first time.

Under the Wage Code, the Centre will set a statutory national floor wage based on living standards and skill levels. While its applicability to gig workers is not yet clear, corporate wage bills could rise once states align with the central threshold.

The brokerage noted that while the codification is a meaningful step, granting and distributing benefits equitably will be difficult without robust digital infrastructure and real-time worker tracking.