Rights Of Gig Workers In India: Legal Framework And Challenges

“The Joy built upon successful slaughter is not the right kind of joy, it will not do, it is fearful and it is trivial.”

                                                                                                                        -Ursula K. Le Guin

I.         INTRODUCTION

Gig Workers means a person who performs work or participates in a work arrangement and earns from activities outside of traditional employer-employee relationship. The gig economy has emerged as a vital component of world’s labor market after the 2008 global financial crisis.¹ Gig economy is driven by technological advancements, changing career aspirations, and the demand for flexible, location-independent work. Gig work fit the bill effortlessly, as it was accepted as a positive trade-off between a certain amount of independence and the loss of employment protections, interest representation, and minimal social security. These workers are often called as a short-term, task-based engagers, who are reshaping employment structures, providing millions of Indians with opportunities in sectors like food delivery, ride-hailing, and freelancing.

Despite their substantial contributions, gig workers often operate in precarious conditions due to a lack of legal protection. Current labor laws, including the Code on Social Security, 2020, provide limited recognition and coverage for gig and platform workers. Issues such as inadequate social security, absence of workplace protections, and insufficient regulation exacerbate their vulnerabilities. Many gig workers are excluded from essential benefits like health insurance, pensions, and maternity leave, leaving them financially insecure and socially marginalized. Gender disparities further compound these challenges, with women gig workers facing unequal pay, safety concerns, and societal constraints.

One of the most significant concerns for Gig Workers is the health and mental well-being, driven by extended working hours, performance pressures, and unsafe work environments. Surveys indicate that a majority of gig workers suffer from chronic stress and exhaustion, with limited access to support systems. Even the COVID-19 pandemic highlighted the sector’s fragility, as gig workers were among the most financially impacted groups, often without the safety net of traditional employment benefits. Ironically, however, this sector appears to be worst affected by the onslaught of the pandemic,² given the informal manner in which it has so far operated. Recently, the World Economic Forum has emphasized the urgent requirement to respond to the needs of a growing global informal workforce, including gig workers, by creating newer systems of social protection, especially in light of the ongoing pandemic.³

This paper aims to critically evaluate the current legal framework governing gig workers in India, examining its strengths and limitations. It explores the social, economic, and health challenges faced by gig workers, emphasizing gender-specific issues and workplace inequities. Drawing on case studies from states like Rajasthan, Karnataka and Jharkhand, along with international comparisons, the paper also proposes actionable policy recommendations. This includes expanding legal recognition, enhancing social security schemes, addressing mental health concerns, and promoting gender-inclusive policies.

By bridging gaps in existing labor laws and implementing robust welfare measures, India can ensure a more equitable and sustainable gig economy. Protecting the rights of gig workers is not only a matter of social justice but also essential for fostering inclusive growth in an increasingly digital economy. This study will provide for a balanced approach that supports the flexibility of gig work while safeguarding the rights and well-being of those who handle this dynamic sector.

II.         PRESENT SCENARIO OF GIG ECONOMY IN INDIA

India is one of the top places in the world for gig workers, ranked at the 5^th position in the world. Over 15 million skilled individuals are engaged in freelance work in India, which forms nearly 40% of the total freelancers in the world. According to Forum for Progressive Gig Workers, the gig economy market is expected to grow at a compounded annual growth rate of 17 per cent to reach a gross volume of $455 billion by 2024, its contribution to India's gross domestic product (GDP) is estimated to be substantial, with the potential to add 1.25 per cent to GDP by 2030 and create 90 million jobs in the long term.⁴ Further, according to NITI Aayog’s indicative estimates based on national labour force survey data, in 2020–21, 77 lakh (7.7 million) workers were engaged in the gig economy and as per the Economic Survey 2023-24, the gig workforce is expected to expand to 2.35 crore (23.5 million) and form 6.7 per cent of the non-agricultural workforce or 4.1 per cent of the total livelihood in India by 2029–30.  Around 50 percent of projects with startups, major corporations, and professional services have indicated strategy, technology, and marketing as the top three talents in demand to offload work to gig workers.⁵

Although India’s gig economy is booming, those employed at the bottom of the pyramid are subject to extremely difficult conditions. A recent multi-city survey, which covered over 10,000 cab drivers and delivery persons in cities, highlights several facts about the persisting issues in this particular sector which include long working hours, earnings that fall short of meeting household expenses, arbitrary deactivation and blocking of identity (ID) by platforms, and high physical and mental stress etc.

The report noted that 41 per cent of cab drivers and 48 per cent of delivery persons reported an inability to take even a single day off in a week. 86 per cent of delivery personnel also said that the 10-minute instant delivery was completely unacceptable to them. The lack of time off has been leading to burnout and negatively impacts the mental and physical well-being of these workers, as 99.3 per cent drivers reported one or more forms of physical health issues like body pain, and working in harsh weather etc. Similarly, 98.5 per cent of gig workers reported one or more mental health issues as a result of this work,⁶ including anxiety, stress, panic, irritability, short-temperedness and panic attacks etc. Nearly 83 per cent cab drivers reported working for more than 10 hours in a day, while 78 per cent delivery personnel worked for the same duration, showed the report titled “Prisoners on Wheels” based on a survey by the University of Pennsylvania and the IFAT. The monthly earnings of the cab drivers and the delivery persons are below the basic pay scale leading to difficulty in managing household expenses, as experienced by over 70 per cent of them. The demand for gig workers continues to grow with the highest demand being recorded for the sales and Marketing roles, which was revealed in the first edition of Taskmo Gig Index. It also reported that the number of gig workers registered on the platform in May 2022 was 60,000 resulting in a 15.38% growth in the workforce joining the gig economy, compared to the month of April.

 Additionally, the Index also shows a 50% growth in active gig workers on the platform in the last 5 months. It also showed that around 10,000 tasks are allocated to the gig workers which are completed on a daily basis amounting to 3,00,000 allocated tasks in the past five months. It has also been revealed that the top recruiters of gig workers have strengthened their roots across Tier-2 and Tier-3 cities such as Pondicherry, Mirzapur, Patna, Jabalpur and Kanpur. In contrast, metro cities continue to maintain the growth momentum for gig workers. Taskmo in itself witnessed a huge surge in demand for gig workers across Quick Commerce, HeathTech, Fintech and E-Commerce sectors.

While demand in Tier 2 cities like Indore (59%), Bhopal (22.4%), and Pune (20%) was nearly on par with that of metro areas cities like Hyderabad (45%), Mumbai (45.45%), Delhi (32%), Bangalore (25%), and Chennai (23.4%), experienced the highest growth. Job profiles including Business Development Executives (500%), Field Sales Executives (374%), Digital Promoters (200%), Brand Promoters (75%), and Micro Influencers (50%) have witnessed a tremendous increase in demand for the gig segment.

The fact that Millennials and Gen Z (19 to 25 years old) make up 48% of the gig labour today shows that young people in India are quickly embracing gig and freelancing work with an appetite for flexible hours. While gig workers in the age range of 41–60 only account for 20% of the total pie, the age group of 26–40 holds a 32% share of the gig economy. Furthermore, notwithstanding the fact that women make up only 28% of this category, gig serves as a flexible means of employment for working women in India. Individuals with gig jobs have the ability to take charge of their professional lives, make independent decisions, and determine their own work schedules. The study also found that both male (41%) and female (40%) respondents were enthusiastic about working on various initiatives. This shows that gig workers, regardless of gender, value the option to participate in a variety of work activities.

III.         COMPREHENSIVE LEGAL FRAMEWORK FOR THE UNORGANIZED SECTOR: ANALYZING INDIA'S FOUR LABOUR CODES

India’s labor market has witnessed significant reforms with the introduction of four labor codes aimed at enhancing the welfare of workers in the unorganized sector. Among these, the Code on Social Security, 2020, stands out for its comprehensive approach to amalgamating nine prior enactments. This consolidation is a result of recommendations made by the 2nd National Labour Commission, underscoring the need to simplify and modernize India’s labor laws for greater inclusivity and protection.

The Code introduces critical definitions to classify workers in the unorganized sector. Section 2(86) defines an “Unorganized Worker”, while Section 2(75) outlines a “Self-Employed Worker”, and Section 2(61) specifies a “Platform Worker” as individuals engaging in platform-based tasks. To address the diverse needs of these workers, Section 6 of the Code, particularly Sections 6(7)(a) and 6(7)(c), mandates the formation of a National Social Security Board by the Central Government. This board is tasked with recommending suitable schemes to extend social security benefits to unorganized workers, including gig and platform workers. The board's composition may vary depending on its specific mandate, ensuring a tailored approach to the unique challenges faced by different categories of workers.

The Code empowers the central government to introduce social security schemes specifically tailored for gig and platform workers. These schemes may cover essential areas such as accident insurance, health and maternity benefits, life and disability cover, education, old age protection, and crèche facilities for childcare. Additionally, the Code obligates the government to constitute the National Social Security Board, which is tasked with recommending and monitoring these schemes to ensure their effective implementation. Under Chapter IX, Sections 112 to 114 outline detailed provisions for the welfare of gig workers. The Code enables the establishment of helplines or facilitation centers to support gig workers, providing clarity on their functions and responsibilities. It mandates the registration of all unorganized sector workers, including gig workers, with the central government, making registration a prerequisite for availing of the benefits offered by any social security scheme. And further empowers the central government to create schemes addressing key areas such as life and disability insurance, accident cover, health and maternity benefits, and old age protection, among others.

The Industrial Relations Code, 2020 further complements the reform agenda by replacing three major labor laws, thereby unifying and streamlining India’s industrial relations system. This code regulates key aspects of employment, including terms of service, dismissal, layoffs, strikes, collective bargaining, and the resolution of labor disputes. While the code applies certain provisions to platform and gig workers, defined as individuals operating outside traditional employer-employee or contractual relationships, it falls short of granting them equivalent rights and protections afforded to regular employees. By failing to explicitly recognize gig and platform workers as laborers or employees, the code creates a gap in safeguarding their fundamental rights.

In addition to these codes, the Code on Wages, 2019, and the Code on Social Security, 2020, represent progressive steps toward recognizing the distinct needs of freelance workers. These codes propose minimum wage requirements, accident compensation, and social security benefits as vital protection for gig workers. However, their enforcement remains inconsistent, hindered by the dynamic and evolving nature of the gig economy. The challenge lies in adapting these protocols to ensure robust implementation in a landscape characterized by fluid work arrangements and a decentralized workforce. Moreover, older legislation like the Contract Labour Act, 1970, and the Employment Compensation Act, 1923, though not explicitly designed for the digital era, contain provisions that could potentially apply to gig and platform workers. However, judicial scrutiny and complete implementation of these laws in the context of the gig economy remain limited. This leaves a significant segment of the workforce exposed to exploitation, lacking basic labor rights and protections.

Despite these legal advancements, the gig economy’s rapid evolution necessitates ongoing legislative and policy adaptation. While the newly introduced labor codes signify a commendable move toward recognizing and addressing the needs of the unorganized and gig workforce, challenges in enforcement and judicial interpretation persist. A balanced and proactive approach, including clearer definitions, stronger enforcement mechanisms, and regular review of laws, is essential to safeguard the rights and welfare of workers in India’s unorganized sector. As the gig economy continues to expand, ensuring equitable protection for all workers will be critical to fostering an inclusive and sustainable labor ecosystem.

IV.         LOOPHOLES IN THE LEGAL FRAMEWORK FOR GIG WORKERS IN INDIA

The current legal framework for gig workers in India, primarily governed by the Code on Social Security, 2020, suffers from several critical shortcomings, leaving gig workers vulnerable to exploitation and without sufficient safeguards. A fundamental flaw lies in the vague classification and delineation of contract work, which fails to specify the obligations of digital platforms toward their workers. This ambiguity enables digital platforms to avoid taking responsibility for their workers' welfare, perpetuating disparities such as gender inequalities. Women gig workers, often relegated to low-paying sectors, remain underutilized and undercompensated due to a lack of targeted legislative measures. Furthermore, the absence of a cohesive legal structure designed for the gig and contract economy limits workers’ awareness of their rights and the procedures for addressing grievances, creating barriers to effective redress.

The Code on Social Security, 2020, while dedicating Chapter IX to unorganized, gig, and platform workers, has an inconsistent and overly generalized structure. Provisions specific to gig and platform workers are limited to Sections 112, 113, and 114, leaving significant gaps in coverage. This limited scope creates confusion regarding the applicability of social security schemes to different categories of workers, complicating enforcement. The Code also fails to address income fluctuations inherent in gig work. While long-term benefits like provident funds are included, they are impractical for workers with inconsistent earnings. Many gig workers are reluctant to opt for social security schemes that require contributions from their already limited incomes. Moreover, penal provisions against employer deductions from workers' pay are ineffective as costs borne by employers for these benefits often result in reduced hiring or non-compliance, as seen in cases following the implementation of increased maternity leave benefits.

Another significant issue is the absence of nationwide rules defining the status and rights of gig workers. A draft labor code in 2020 proposed accident, health, and retirement benefits funded jointly by state and central governments and platforms, but this has yet to materialize at a national level. Additionally, safety concerns, particularly regarding sexual harassment, highlight the deficiencies of existing laws. While the POSH Act (Prevention of Sexual Harassment Act) provides a comprehensive definition of the workplace, its applicability to transient, digital, and decentralized environments used by gig workers remains uncertain. Rajasthan's Platform Based Gig Workers Act, 2023, has set an innovative precedent by addressing these issues at the state level, offering provisions for registration, welfare funds, and grievance redress mechanisms. However, a cohesive national framework ensuring uniform protections across states remains absent, leaving gig workers in India subject to inconsistent and inadequate protections. Addressing these loopholes is critical to creating a sustainable, equitable framework for India’s gig workforce.

Footnotes

^{1 Victor G. Devinatz, “Independent Workers: Growth Trends, Categories, and Employee Relations Implications in the Emerging Gig Economy‟ (2019) 31(1) Employee Responsibilities and Rights Journal 61, 62.}

^{2  Josephine Moulds, “Gig Workers among the hardest hit by coronavirus pandemic‟ (World Economic Forum, 21 April, 2020) accessed on 10 December 2024.}

^{3 Samir Saran, “Challenges and Opportunities in the Post-Covid-19 World Technology: Digital Epiphany? COVID-19 and our Tech Futures‟ (World Economic Forum, Insight Report, May 2020) Ch 5, 27 accessed on 10 December 2024.}

^{4 https://www.business-standard.com/economy/news/india-s-gig-economy-could-add-90-mn-jobs-enabled-by-large-multinationals-124112800721_1.html}

^{5 Indian Economy needs to generate nearly 78.5 lakh jobs annually in the non-farm sector until 2030 to cater to the rising workforce, Ministry of Finance, https://pib.gov.in/PressReleasePage.aspx?PRID=2034952}

^{6 Longer working hours & low earnings: How India's gig workforce fares | News - Business Standard}