Amazon, Flipkart, Swiggy, Zomato to contribute to fund for gig workers’ welfare

It envisions the creation of a Social Security Fund for gig and platform workers with contribution from Central and state governments, corporate social responsibility, fines collected due to compounding, etc.

This fund will finance social security and welfare schemes, including life insurance, disability insurance, health and maternity benefits, and provident fund schemes.

“For years, the country’s gig workers subsidised its growth from the margins. Today, they step into the system. Millions of gig workers now have portable benefits, health coverage, and social security that enables mobility across states and jobs,” said Rishi Agrawal CEO and co-founder of Teamlease Regtech.

Aggregators like Amazon, Flipkart, Swiggy and Zomato will have to contribute 1–2 per cent of their annual turnover towards this fund, with the total contribution capped at 5 per cent of the amount payable by them to the workers. Gig workers “now have rights to get mandatory appointment letters, accident insurance, disability protection among others. In addition, the reform addresses their financial invisibility by extending portable provident fund contributions, pension eligibility regardless of employer continuity, access to affordable credit through formal records among others,” Agrawal added.

The Code also establishes a National Social Security Board for workers to advise the Centre on framing and monitoring suitable schemes for different sections of unorganised workers, gig and platform workers.

As per the Code, the Centre may, from time to time, frame suitable social security schemes for these workers on matters relating to:  life and disability cover; accident insurance; health and maternity benefits; old age protection; and crèche.

Accidents occurring while travelling between home and workplace will now be treated as employment-related accidents.

To ensure workers can access benefits, platforms will have to work with the government to register all gig and platform workers. This registration will use an Aadhaar-linked Universal Account Number so benefits can move easily across states — a key need for gig workers who often travel for work.

According to the Niti Aayog, the sector is expected to employ  2.35 crore by 2029–30. Despite that, at present, there is no law by which social security benefits can be provided to gig and platform workers, who often work long hours, in extreme conditions, typically as independent contractors with far fewer benefits compared to full-time employees.