Ola, Uber, Zomato, Swiggy Can Spend 5% Of Wages Payment For Compulsory Social Security Of Gig Workers

Social security benefits to gig workers for the first time.

• Aggregators like Uber, Ola, Swiggy, and UrbanClap to deposit certain part of their annual turnout for their workers’ social benefit.
• Scheme to provide disability cover, health insurance, maternity benefits, and retirement protection to gig workers

On 15 November, the Ministry of Labour and Employment released the draft rules for invoking the Code on Social Security passed by the parliament in September. The code envisions to provide social security benefits to gig economy workers and platform workers through an online government portal. To utilize these benefits, the gig worker will have to register themselves on the portal with the help of Aadhaar or any self-declaration of their details.

Social Security Now Mandatory For Gig Workers

For the arrangements of security fund, aggregators like Swiggy, Zomato, Uber, and Ola will be required to pay a certain percentage of their turnover for their workers’ social welfare. The government has given them the liberty to deposit either 1-2% of their annual turnover or 5% of the payment liable to workers depending on whichever is more affordable for the company. 

According to the rules, to register on the portal the worker has to age between 16 and 60 years and has to be associated with an aggregator for at least 90 days for the foregoing year. On the other hand, the aggregator company needs to recurrently update the details of the platform workers associated with them. Failure to update information or satisfy the criterion will make the worker ineligible for the benefits of the scheme.

A National Social Security Board for Gig Workers and Platform Workers of 25 members is to be formed, which can contrive different plans for the workers belonging to this scheme.

Who Can Benefit?

For the first time, the needs of independent contractors, online platform workers, contract firm workers, on-call workers, and temporary workers are taken into consideration. Since these workers are not on any company’s payroll, they are not eligible for benefits that the permanent employees get.

They usually get paid as per the tasks given to them and don’t have a guaranteed minimum wage. The scheme has definitely emerged as a ray of hope for this portion of workers which was indirectly ignored before the new code was announced.

The scheme has got a positive response from the Aggregators side as well. CEO of Uber Dara Khosrowshahi and CEO of Urban Company Abhiraj Bhal have voiced their support for this Social security code.

Thus, the initiative has proven to be a silver lining for 450 million gig workers all across India, recognizing them as a separate class and setting them apart ambiguity. It is expected to be launched in the next financial year.