Context
- The gig economy has transformed how individuals work and connect in the modern era, propelled by technology innovations. However, social security presents a huge barrier for gig workers.
- In order to protect their wellbeing and establish a fair and sustainable work environment, it is necessary to ensure social security benefits for gig workers.
Relevance:
GS Paper2 : Government policies and Intervention
Mains Question
How might the Social Security Code of 2020 (2020) help meet the social security needs of gig workers? (250 Words)
Understanding Gig Workers and the Gig Economy
- Gig Economy: A free market system in which businesses frequently hire independent contractors for brief tasks and temporary positions are popular.
- Gig Worker: People who work on gigs outside of the typical employer-employee relationship and are paid for doing so.
Gig Economy in India
- With 7.7 million workers participating in the gig economy, India has become one of the largest countries for flexi staffing or gig workers. India’s gig economy has experienced rapid growth.
- Expected Growth: By 2029–30, there will be 23.5 million gig workers, accounting for around 4% of all employment in the nation.
- Job Distribution: Currently, 22% of gig work is high-skilled (such as graphic design and tutoring), 47% of jig work is medium-skilled (such as plumbing and beauty services), and 31% of gig work is low-skilled (such as taxi driving and food delivery).
Challenges Gig Workers Face When Trying to Access Social Security:
- Due to their uncertain job status, gig workers are frequently excluded from social security and labour laws, depriving them of fundamental labour rights and protections.
- Economic Uncertainty: Gig work’s demand-driven nature creates job and income insecurity, making social security benefits essential for ensuring the country’s financial stability.
- Health and Well-Being: The vulnerability of gig workers to unforeseen medical expenses due to a lack of access to employer-sponsored health insurance and other benefits highlights the importance of social security protection.
- Equity in Opportunities: Gig workers who are not covered by standard employment rights are subjected to abusive working conditions and low pay, underscoring the significance of social security in guaranteeing a level playing field.
- Long-term Financial Security: Gig workers may find it difficult to save for the future without employer-sponsored retirement plans, necessitating the provision of social security benefits.
Main Obstacles to Gig Workers Receiving Social Security:
- Classification Complexity: Because the lines between self-employment and dependent employment are hazy, determining the scope of a company’s obligations towards gig employees is difficult.
- Flexibility Dilemma: Creating social security benefits that take into account the flexibility offered by the gig economy, which lets workers choose their hours and workload, is a challenging task.
- Funding and Cost Distribution: Traditional social security systems rely on employer and employee contributions, but in the gig economy, where employees are frequently independent contractors, choosing the right funding sources can be challenging.
- Coordination and Data Sharing: Accurately determining gig workers’ earnings, contributions, and eligibility requires effective coordination and data sharing among gig platforms, governmental organisations, and financial institutions.
- Education and Awareness: It may be difficult to provide adequate coverage because many gig workers may not be aware of their rights and entitlements with relation to social security benefits.
Steps for Gig Workers to Ensure Social Security:
- Implementing the Social Security Code (2020): The Social Security Code must be implemented immediately in order to establish legal provisions and a Social Security Fund governed by a board with the support of the government.
- Learning from Global Models: India may create effective social security frameworks by imitating countries like the UK, which classifies gig workers as “workers” with benefits, or Indonesia, which offers insurance coverage.
- Increasing Employer Responsibilities: Particularly in situations when gig workers are unable to enter into direct contracts with clients, gig organisations should be more accountable for the welfare of gig workers by offering benefits on par with those offered to normal employees.
- Wider Health Coverage: To ensure adequate coverage for gig workers, employers should offer on-the-job accident insurance and broaden the alternatives for health insurance.
- Government Support: To make it simpler for Indian gig workers to access international markets, the government should encourage high-skill gig labour in industries like education, banking, and customer service. Governments, gig marketplaces, and labour organisations must work together to create fair and open social security benefit distribution systems.
Conclusion
It is crucial to address the regulation of gig labour in India because it is predicted to employ a sizable population over the next ten years. Delaying the creation of a regulatory framework for gig workers will have an adverse effect on both the prosperous digital economy of India and the welfare of its workforce. A legal framework that promotes both economic growth and the welfare of gig workers must be developed through tripartite consultations involving the government, corporations, and gig workers.
