The 24th edition of the Spotlight focuses on the Rajasthan Platform based Gig Workers (Registration and Welfare) Act, enacted on July 24, 2023.
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Rajasthan Platform Based Gig Workers (Registration and Welfare) Act, 2023
What is the Gig Economy, Gig Worker and Platform Economy as per the Act?
A Gig economy is a free market system in which temporary positions are common and organisations contract with independent workers for short-term engagements. 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 Act 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. The platform economy, where digital platforms connect buyers and sellers or service providers and consumers, is ever-expanding.
Platform-based work can take various forms and be found in numerous industries, including but not limited to ride-hailing and delivery services, freelance writing and graphic design, and task-based platforms. The gig and non-standard workers come from various backgrounds, including different genders, age groups, and locations throughout the country.
Although gig work offers several benefits, including flexibility, autonomy, and the opportunity to diversify income sources, gig workers often lack the benefits and protections associated with traditional employment, such as healthcare benefits, retirement plans, or job security. The evolving nature of gig work has prompted discussions about labour laws, regulations, and the need to ensure fair treatment and protection for gig workers.
The Potential of the Gig Economy
The gig economy, supported by the government, has the potential to create jobs, particularly among educated youth. The July 2022 NITI Aayog report indicated 7.7 million gig workers in June 2022, and it is expected to triple by 2029-30.
In Rajasthan alone, there are an estimated 2.25-2.70 lakh gig workers, fostering healthy competition due to some working for multiple platforms. However, it also exposes workers to risks due to the absence of traditional employer-employee relationships, leaving them without fixed incomes, insurance and retirement benefits. India's labour laws have limited recognition for gig workers, but the introduction of the e-Shram portal and the Code on Social Security, in 2020, marked steps toward their inclusion. Yet, stronger policy implementation is urgently needed to protect gig workers, ensure fair treatment, and social security, and contribute to a more equitable workforce for India's future.
It is important to acknowledge that the gig economy also comes with challenges and concerns. These include issues related to worker protection, income stability, access to benefits, regulatory ambiguity, and income inequality. As the gig economy continues to evolve, policymakers, businesses, and workers must work together to harness its potential while addressing these challenges. Balancing the flexibility and opportunities it offers with fair labour practices and social protections will be a key consideration in shaping the future of work.
Why there is a need for the Act?
Rajasthan’s Platform-Based Gig Workers (Registration and Welfare) Act, 2023
The Rajasthan government has become the first state in India to introduce the Rajasthan Platform Based Gig Workers (Registration and Welfare) Act, 2023. This will help formulate schemes for the benefit of the gig workers, provide them immediate financial assistance in case of accidents and medical emergencies, and offer them health insurance coverage under state government schemes. Moreover, it will ensure gratuity, scholarships, and pensions. It will thus result in attracting more youth to take up gig work.
The state government has also allotted Rs 200 crore to the Rajasthan Platform-Based Gig Workers Social Security and Welfare Fund and levied a ‘welfare cess’ (1 per cent of the total value of the service or delivery) on consumers to ensure better rights and facilities for gig workers.
Adding to this, as per the Act, the government would constitute a Welfare Board for the platform-based gig workers to register them and their aggregators. The Board will generate a unique ID for a gig worker, which would be valid for three years. The information of all registered gig workers will be maintained in a database and help workers seek benefits from government welfare schemes, such as the PM Sambhal scheme (which provides for old age pension), and also to seek redressal against aggregators over payment disputes and other issues.
The Act also states that if the aggregators contravene any of the provisions made by the Board, such as not filing annual reports, and not integrating gig worker data with the board’s database, they will have to pay a fine of Rs 10 lakh or can be suspended or prevented from functioning in Rajasthan.
The Act carves out several services that a primary employer or an aggregator provides, which include:
The Rajasthan Platform Based Gig Workers (Registration and Welfare) Act, 2023, marks a significant milestone in recognising and safeguarding the rights of gig workers in the state.
The initiative by Rajasthan to recognise the potential of the gig economy and provide social security for gig workers sets a precedent for other states. However, addressing the issues of gig work demands a national policy to ensure uniform rights and welfare measures. As the future of work becomes increasingly gig-oriented, robust regulations are essential for fair treatment, social security, and worker protection.
This move by Rajasthan has not only motivated other states, such as Kerala, to work towards similar laws and policies for gig workers but also signifies a positive step in fostering a more inclusive and equitable workforce in India's evolving gig economy. Therefore, this is a step in the right direction for the ‘Future of Work’.