Rajasthan and Karnataka become first states to offer gig workers social security and insurance benefits

In the first scheme of its type in India, the Rajasthan Assembly recently passed the historic Rajasthan Platform Based Gig Workers (Registration and Welfare) Bill 2023. This ground-breaking piece of legislation aims to set up a welfare board and a dedicated social security fund for platform-based gig workers in the state. The bill aims to address the lack of protection and social security benefits for gig workers, who were previously classified as ‘partners’ rather than employees when working for app-based companies like Ola, Uber, Swiggy and Zomato.

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The law will also impose a tax on each customer transaction on digital platforms like Ola and Zomato to fund the new welfare schemes for gig workers, expected to be between 1-2 per cent.

The bill will create a welfare board consisting of state officials and representatives from gig workers, aggregators and civil society, and at least one-third of the nominated members will have to be women. The board will ensure that all gig workers and aggregators are automatically registered with it, generate a unique ID for every platform worker and maintain a database of all app-based gig workers and aggregators operating in Rajasthan.

The social security benefits available to gig workers will include accident and health insurance, maternity benefits, pension contributions, employees provident fund (EPF), employees; state insurance (ESIC) and scholarships. The welfare board will also offer a grievance redressal mechanism for gig workers and undertake regular consultations with trade unions who work with platform workers.

Fines for aggregators

The Bill also includes a provision to levy fines on aggregators for failing to pay the welfare levy. These will start at up to Rs 5 lakh for first contravention but go up to Rs 50 lakh for subsequent violations.

Speaking to the Hindustan Times, Rajasthan’s cabinet minister Sukhram Vishnoi said: “Despite major contribution in economy and employment, gig workers form a part of unorganised workers and are still not covered under the labour laws. They do not receive the same level of protection as traditional employees get.

“So far there is no regulatory framework for gig workers and aggregators. Therefore, the [Rajastha] state government decided that interests of gig workers should be protected and they should be provided social security benefits.”

Karnataka to offer free insurance cover

Meanwhile, in another significant move towards providing social security benefits for gig workers in the country, the Karnataka government has announced that all gig workers in the state will receive free life insurance and accidental insurance of another worth Rs 4 lakh.

Presenting his 14th financial budget overall and his first for the current Congress government in the Legislative Assembly, Karnataka chief minister and finance minister Siddaramaiah said: “In order to provide social security to the ‘gig workers’ in the unorganised sector, i.e. employed as full-time or part-time delivery personnel in ecommerce companies like Swiggy, Zomato, Amazon etc, insurance facility of a total Rs 4 lakh will be provided.”

The cover consists of life insurance and accidental insurance of Rs 2 lakh each and the entire cost of the insurance premiums will be borne by the Congress-led state government, Siddaramaiah said.

Gandhi hears workers’ grievances

In the run-up to the polls in Karnataka in May, Congress leader Rahul Gandhi met and spoke to gig workers and delivery persons working for various companies in Bengaluru and reiterated his party's promise to set up a Gig Workers’ Welfare Board in Karnataka with a corpus fund of Rs 3,000 crore and to ensure gig workers receive minimum hourly wages

Gandhi wanted to get a good understanding about the lives of delivery workers and hear about the problems they face around a lack of stable employment and the rising prices of basic commodities, the Congress Party said in a news statement.

The gig workers told Gandhi that due to a lack of regular employment they have been forced to take up jobs that are underpaid. The Congress party says there are more than two lakh gig workers employed by app-based platforms in Bengaluru alone.