Rajasthan’s recent Gig Worker’s Act, 2023 (RGW) seeks to bolster social security for gig workers, echoing the central Code on Social Security, 2020. By creating a board with representatives from all stakeholders, it aims to oversee the welfare of these workers, funded by a newly-introduced cess on aggregator transactions. However, concerns arise: the Act's vagueness on defining benefits, historical inefficiencies of similar boards, and uncertainty on how to calculate earnings for the cess. Additionally, how benefits are doled out to multi-platform workers remains a grey area. While the RGW Act marks progress, there's a broader call for policies that holistically address gig worker rights, resonating with global directives for enhanced worker protection and decent working conditions.
The Rajasthan government recently passed the Rajasthan Platform-Based Gig Workers (Registration and Welfare) Act, 2023 (RGW), a pioneering state-level initiative to offer social security to gig workers. The RGW Act follows the Code on Social Security, 2020 at the Central level, which is yet to be brought in force. The cornerstone of the RGW is the establishment of a tripartite board, bringing together representatives from aggregators, the government and gig worker organizations. The board will be responsible for registering gig workers in the state, introducing and managing social security schemes for them, and ensuring the compliance with the RGW Act. Additionally, the RGW Act introduces a welfare cess for transactions on the aggregator platforms. The proceeds from this cess will feed into a social security fund dedicated to the welfare of these workers. While the Act is undoubtedly progressive, a detailed examination hints at aspects that might need a more nuanced evaluation. Specifically, there are three major issues that may undermine the effectiveness of the RGW Act.
First, the RGW Act fails to clearly specify the range of social security benefits. It delegates the responsibility of defining social security measures to the welfare board. While this can be seen as an attempt to maintain flexibility in the dynamic world of gig work, the absence of broader guiding principles within the RGW Act creates uncertainty. Both gig workers and businesses are left unsure of what to expect in terms of benefits and obligations respectively.
Second, the efficacy of the conventional welfare board model is debatable. For instance, the welfare boards for construction workers, reveal glaring inefficiencies: from the substantial 87,478 crores amassed as welfare cess, an alarming 38000 crore remained unused[1]. What’s more, during the COVID-19 pandemic, despite available funds, only a third of the workers (around 18 million) were able to avail of benefits.[2] The registration process and accessing entitlements become mired in red tape, often excluding those without essential documentation.[3] While welfare boards are a familiar approach to aid informal workers[4], their efficacy remains largely unproven. This begs the question why they have been reprised under the RGW Act.
Third, the RGW Act lacks clarity on determining the value of each transaction subject to cess. Gig workers’ earnings comprise of additional incentives. These include effort-based payments for the distance travelled, peak-time bonuses, rewards for achieving performance targets and even customer tips. While the RGW Act explicitly exempts taxes from this calculation, it does not specify if the cess will apply solely to the base earnings.[5] Should it only consider the base rate per delivery, it won’t accurately represent the actual income earned by the gig worker, a substantial portion of which comes from these added incentives. Conversely, if the cess is applied to the full transaction value, businesses might face heightened costs. This may prompt platforms to reconsider bonus structures or even eliminate customer tipping options altogether to prevent end consumer costs from sky-rocketing.
Besides these challenges, there is much that is still ambiguous. The RGW Act stipulates that the State government shall detail the employment details of gig workers across multiple aggregators or primary employers, regardless of their engagement’s duration.[6] This prompts several questions: If a worker is associated with several platforms, are they eligible for benefits from all? How will the state government handle overlapping benefits? Will there be a cap on the cumulative benefits a gig worker can receive from different platforms?
In conclusion, the rise of platform-based gig workers underscores the need for robust regulatory frameworks. The RGW Act is a promising start towards ensuring social security, but is just an initial step in a longer journey. To empower gig workers, we need laws that go beyond just security, to promote better working conditions and support collective action of gig workers. This aligns with G20 New Delhi Leader' Declaration that emphasizes on enhanced social protection and decent working conditions. As the global narrative shifts to preparing for the future of work, it is time our policies evolve cohesively, ensuring an inclusive, protected, and dignified work environment for all gig workers.
——
[1] S. Rajora, ‘Construction workers: Rs. 38000 crore cess funds for welfare unused’, Business Standard (April 2023)
[2] H. Upadhyay, ‘Building discontent: Welfare boards have failed to protect India’s construction workers’, The Caravan (July 2020)
[3] V. Lalwani, ‘Welfare laws for construction workers may be failing them, a social audit in Delhi finds’, Scroll (September 2018)
[4] S. Dewan, ‘Big Problems, Small Wins: Social Security for Rajasthan’s Gig Workers’, The India Forum (August
[5] S. Chatterjee, ‘Rajasthan’s gig worker Bill: Bound for failure without corrections and clarifications’, The Leaflet (August 2023)
[6] Section 8(3) of the Rajasthan Platform Based Gig Workers (Registration and Welfare) Act, 2023