Annual Impact Report 2023

Decoding the Rajasthan Platform-Based Gig Workers (Registration and Welfare) Bill

Decoding the Rajasthan Platform-Based Gig Workers (Registration and Welfare) Bill
By Isha Sharma and Arya Raje
01/ Introduction

India’s gig and platform economy have seen significant growth in recent years — 56% of the new employment generated is via white-collar and blue-collar gig jobs. A 2021 report1 estimates that one million new jobs would be created by the Indian gig economy in the next two to three years, and that “the gig economy has the potential to service up to 90 million jobs in India’s non-farm economy alone, transact over USD 250 billion in volume of work, and contribute an incremental 1.25% (approximately) to India’s GDP over the long term.”

Gig work entails short-term or freelance arrangements facilitated through online platforms or mobile apps. The platform economy, where digital platforms connect buyers and sellers or service providers and consumers, is ever-expanding.

One reason for this growth is increased smartphone usage and better internet access. Many young and skilled professionals have embraced gig work because of its flexibility. This blog decodes the recent bill for gig workers passed by the Rajasthan government.

02/ How did the Rajasthan bill come into force?

The issue of social security for gig and platform workers has been the government’s focus for quite some time now. In September 2020, the Central Government introduced The Code on Social Security, which requires both the centre and the states to set up a fund for gig workers, platform workers, and unorganised workers to ensure that they have access to insurance, a provident fund, and pension benefits.

Although the code has the President’s assent, there is little information about its implementation beyond a gazette notification.

The civil society in Rajasthan has been pivotal in passing the bill; multiple civil society and citizen groups have been advocating for it over time2. Rajasthan has a history of progressive policies for workers’ rights, having recently passed other crucial legislations such as the Rajasthan Right to Health Care Act 2022 and the Rajasthan Minimum Guaranteed Income Bill 2023. These developments were essential strides towards ensuring that all workers in the state are treated justly and given the necessary support to improve their livelihoods.

03/ Why is the Bill needed?

According to Niti Aayog, India had 77 lakh gig and platform workers in 2020–21, and the workforce is expected to expand to 2.35 crore by 2029–30. The gig workers will potentially form 6.7% of the non-agricultural workforce — this means 4.1% of the total livelihood in India by 2029-30. The gig economy has caused a surge in low and medium-skilled work demand, leading to a shift away from traditional employment relations.

The rise of the gig and platform economy has also raised significant questions about worker rights, job security, and fair labour practices. Policymakers, businesses, and workers have discussed these challenges and implications to ensure that the gig and platform economies can continue India’s economic growth and digital transformation sustainably and equitably.

Hence, a bill geared towards social protection and the welfare of gig and platform workers is the need of the hour. Moreover, the Bill has established a framework to facilitate the formulation of specific social security schemes for gig workers, which is undoubtedly a step in the right direction.

04/ According to the Bill, who is a gig/platform worker?

A gig worker is any person who works via an arrangement outside the ambit of a traditional employer-employee relationship on a contractual basis with a rate of payment.

The Bill applies specifically to platform gig workers. “Platform” means an online transaction-based arrangement of work through which goods and services are exchanged for a specific payment rate.

05/ Who are defined as primary employers and aggregators according to the Bill?

An “aggregator” is a digital intermediary connecting users to sellers or service providers. It includes any entity that works with an aggregator to provide services, such as Zomato, which connects users with restaurants.

On the other hand, a “primary employer” is an individual or organisation that hires platform-based gig workers directly for a specific task, such as plumbing or pest control. An example of a primary employer is Urban Company.

The legislation carves out several services that a primary employer or an aggregator provides, specifying that the Bill applies to them. These include:

  • Ride-sharing services.
  • Food and grocery delivery services.
  • Logistics services.
  • E-marketplace, both for wholesale and retail sale of goods, whether directly to consumers or with another business
  • Professional services provider.
  • Healthcare
  • Travel and hospitality.
  • Content and media services.
06/ What does the Bill provide for?

The primary purpose of this Bill is to facilitate the guarantee of social security to platform-based gig workers. Let’s take a look at how the Bill does that.

  1. It provides for the constitution of a welfare board, called the “Rajasthan Platform-Based Gig Workers Welfare Board.”
  2. It requires the welfare board to register each platform-based gig worker and every aggregator and primary employer in Rajasthan.
  3. It creates “The Rajasthan Platform-based Gig Workers Social Security and Welfare Fund”. This fund includes a welfare cess, contributions made by platform-based gig workers, money from the State Government, grants, gifts, donations, and so on.
  4. Officially termed the “Platform-based Gig Workers Welfare Cess”, the cess is an additional tax on the aggregator or the primary employer, which must be at least 1% and at most 2% of the value of each transaction the gig worker engages in.
  5. So, how is this welfare cess going to be used? The welfare board will be pivotal here. They have the duty to formulate schemes for ensuring the social security of gig workers and must ensure that they have access to the benefits of these schemes. The schemes include accident insurance, immediate assistance in case of accidents, medical emergencies, health insurance, and other schemes for health, accidents and education. Moreover, monetary benefits in the form of Direct Benefit Transfers (DBTs) are to be transferred to the gig workers.
  6. The Bill also establishes a grievance redressal mechanism for workers, provides for open consultations with trade unions who work with platform workers, and imposes a heavy penalty on aggregators and employers who do not comply with its provisions. This penalty can extend up to INR 50 lakh. The Bill also creates a centralised tracking and management system for transactions on the aggregator platform.
  7. The Bill asks for a diverse welfare board; it includes state officials, representatives of workers, aggregators, and members of civil society, and at least one-third of the members are to be women.
07/ What is the way forward for the Bill?

Once the Bill receives the Governor’s approval and the welfare board established under it becomes operational, the schemes the board formulates will be implemented, including accident insurance, health insurance, etc.

08/ Our take

The Rajasthan Gig Workers Bill is undoubtedly a crucial first step towards ensuring social security for platform-based gig workers, and this legislation can go a long way towards securing the rights they are entitled to and building a more sustainable and equitable society for all. Actual on-ground implementation, tracking, and monitoring of benefits will be crucial for the Bill’s success.

1 Unlocking the Potential of the Gig Economy in India, Boston Consulting Group and Michael & Susan Dell Foundation

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