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What You Need to Know About Labour Laws for Gig Workers in India

In a growing economy like India, proper assessment of working conditions is essential.

The last two decades have been a time of continuous disruptions, technological or otherwise, as a result of increased global activities. Digitisation is one of those areas where India has really progressed well. Even global leaders like McKinsey acknowledge the same. In the last seven years, Indias digital economy has grown by 90%, only second to Indonesia. However, countries like South Korea, the UK and Sweden, still rank higher, a trend that will probably break after this year.

But it is only possible if the informal and independent sectors are better mapped and organised. According to some experts, the countrys digital economy is set to contribute more than $400 billion to the GDP of the nation, if, and only if,the gig workers are included in the traditional labour sector. And that is exactly where the country is heading right now.

The importance of informal workers uplift
In the initial days of digitisation, the informal workers were clueless of their current and future statuses. Further, they also suffered from massive differences in working conditions across several sectors. Achieving uniformity in these conditions without losing the integrity of each sector is thus on the priority list of the government. To achieve that, they have not only started mapping the digital sectors but also rating and reviewing them for achieving better results in a short span.

For example, the Fairwork India Ratings 2020 has considered 11 digital platforms that appoint independent contractors to analyse their working conditions, examine the scope of work and its influence on millions.The report, which included digital platforms like Uber, Ola, Zomato, BigBasket, Swiggy, and others, revealed that heterogeneity exists in management and policies of the companies, thus leading to more confusion and headache.

Nearly three million independent contractors are employed in these digital platforms, so maintaining uniformity is integral. Further, the pandemic and the lockdown that followed are said to be biased against the informal workers. As a result, the government has brought about several changes in the labour laws to include such independent workers and offer them the necessary security and benefits of formal employees.

Let us take a look at those labour laws for gig/independent workers that are currently in place or will be implemented soon.

The labour laws for gig workers in India
Recently, the government amalgamated 29 labour laws into four labour codes to achieve uniformity and reduce confusion. These codes changed the definition of employees to include independent workers to ensure their security and privileges. The Social Security Code 2020, Occupational Safety, Health and Working Conditions Code 2020, and the Industrial Relations Code 2020 now include the gig workers, who have been deprived of all the perks that formal employees get.

So, one may say that these new labour laws are directed towards the gig workers specifically. Let us understand these and their benefits:


  • Social security for independent workers: Under the new codes, even the informal workers will be subjected to social security funds, ESI and EPF benefits. It will create a universal security system for the unorganised sector and increase job security in situations like the pandemic when they were thrown out of employment without any prior notice. Contribution to these funds will not only be the responsibility of the workers but their employers as well. the companies may have to contribute 1-2% of their annual revenue to the fund, the workers may be required to contribute 1-2% of their monthly income. However, sectors with less than 10 employees may opt out of this scheme.
  • More flexible options: Under the Industrial Relations Code 2020, the employers are now free to appoint independent workers with the same benefits (or more) as that of full-time employees. They can take the help of informal workers to complete short-term projects, as the government is going the extra mile to recognise the latter as a part of the workforce. Hence, gig workers will get more career opportunities soon.
  • White-collar jobs for informal workers: Before the pandemic threw everyone off balance, gig workers were more common in areas like food delivery, cab-hailing, online shopping, etc. But presently, they are even getting white-collar jobs in the IT and technology sector to take their respective careers forward. The companies can hire these workers directly without a mediator, or contract labour system.
  • Encouraging women to enter gig workforce: The flexibility of the gig economy system, with its relaxed hours of services, and freedom to work with multiple contractors, is intriguing for women. The gig ecosystem also benefits more than the regular work system, as it reduces overhead costs. The new labour laws will push more talented women towards the unorganised sector, which does not seem so unorganised now.


As an organisation, utilising these new labour codes is crucial to take the hiring game a notch up. Every opportunity should be recognised and used accordingly to reduce the costs of employment without exploiting anyone. You can take the help of professionals who understand the nitty-gritty of the new labour codes. If you are a business owner seeking a flexible workforce, these compliance professionals can help you understand the nuances of your decision to prevent any violation and reduce liabilities.

Get ready for an expanding gig economy in 2021 that will help you increase your network of independent workers.