Gig workers

General Studies Paper 3

Context: The Rajasthan Government is about to bring the Rajasthan Platform-based Gig Workers (Registration and Welfare) Bill, 2023, which has stringent provisions against errant aggregators, including barring them from operating in the State.

Highlights of the Bill

• Rajasthan Platform-based Gig Workers Welfare Board: It will design welfare policies and hear grievances of the workers hired on a piece rate basis. The Bill gives powers to the board to decide the quantum of cess that every aggregator will have to pay towards this social welfare corpus. This cess shall be a percentage of every transaction that takes place on the platform.
• Unique ID: All platform-based gig workers registered with any platform shall be automatically registered with the board irrespective of the duration of their engagement with the platform. The board shall generate a unique ID for every platform-based gig worker registered with one or more aggregators in the State. This unique ID will be valid for three years. 
• Penalty: Data of the gig workers employed with the board and sharing data of every transaction that takes place on their platform, can be fined up to ?10 lakh for the first contravention and up to ?1 crore for subsequent ones. 
  • The Bill also empowers the board to recommend suspension of operations of the errant aggregator temporarily or permanently in the State.
• The draft Bill that is with the Law department currently, will be put in public domain soon inviting feedback.

Who are gig workers?

• Non-standard or gig work consists of income-earning activities outside of standard, long-term employer-employee relationships.
• A gig economy is a labor market that relies heavily on temporary and part-time positions filled by independent contractors and freelancers rather than full-time permanent employees.
• The term is borrowed from the music world, where performers book “gigs”that are single or short-term engagements at various venues.
• The gig economy uses digital platforms to connect freelancers with customers to provideshort-term services or asset-sharing.
• Examples include ride-hailing apps, food delivery apps, and holiday rental apps.

Reasons for a rise in Gig Workers

• Post Pandemic:The trend accelerated during the 2020 COVID-19 pandemic, the gig economy experienced significant increases as gig workers delivered necessities to home-bound consumers, and those whose jobs had been eliminated turned to part-time and contract work for income. 
• Freedom to work from anywhere:These types of positions facilitate independent contracting work, with many of them not requiring a freelancer to come into an office.
• Wide Range of Applicants:Employers also have a wider range of applicants to choose from because they don’t have to hire someone based on their proximity.
• Rise of Technology and Internet: Rise of fast internet and smartphones have made it easier to work from anywhere easily.
• Convenient for Small Organisations:Employers who cannot afford to hire full-time employees to do all the work will often hire part-time or temporary employees to take care of busier times or specific projects.
• More income with more work: People often find they need to move or take multiple positions to afford the lifestyle they want. It’s also common to change careers many times throughout a lifetime, so the gig economy can be viewed as a reflection of this occurring on a large scale.
• Benefits Employers: Employers do not need to provide related benefits, such as medical insurance, Provident Fund, and year-end bonuses which make it a better option for them to pay only for work on a unit basis.
• Work for All:Students can choose lower-skilled jobs and work without academic or professional qualifications. Retirees, housewives, etc. may find it difficult to find part-time jobs on weekdays, but now they can make good use of their spare time to earn extra money.

Challenges

• Hurdle in growth of full time employee:While not all employers are inclined to hire contracted employees, the gig economy trend can make it harder for full-time employees to develop in their careers since temporary employees are often cheaper to hire and more flexible in their availability.
• Work-life balance:For some workers, the flexibility of working gigs can actually disrupt the work-life balance, sleep patterns, and activities of daily life
• Can replace Full time employees:The number of full-time employees required by the company can be reduced as freelance workers take over the work.
• No job security: In effect, workers in a gig economy are more like entrepreneurs than traditional workers. While this may mean greater freedom of choice for the individual worker, it also means that the security of a steady job with regular pay and benefits.
• No regular job benefits:Many employers save money by avoiding paying benefits such as health coverage and paid vacation time. because there is no formal employment relationship with the platform company, there are usually no employee benefits in short-term contracts, which are less guaranteed than full-time and part-time jobs, and are difficult to write on resumes.

India and Gig Economy

• In 2020, 7.7 million workers were engaged in the gig economy.
• The gig workforce is expected to expand to 23.5 million workers by 2029-30.
• At present about 47% of the gig work is in medium skilled jobs, about 22% in high skilled, and about 31% in low skilled jobs.
• Trend shows the concentration of workers in medium skills is gradually declining and that of the low skilled and high skilled is increasing.
• It may be expected that while the domination of medium skills would continue till 2030, gig work with other skills will emerge.

Steps Taken by Government of India for Gig Workers

• Code of Social Security, 2020: The Government has formulated the Code on Social Security, 2020 which envisages framing of suitable social security schemes for gig workers and platform workers on matters relating to life and disability cover, accident insurance, health and maternity benefits, old age protection, etc. However, these provisions under the Code have not come into force.
  • Platform workers are those whose work is based on online software apps or digital platforms. Non-platform gig workers are generally casual wage workers and own-account workers in the conventional sectors, working part-time or full time.
• e-Shram Portal:The Government has also launched e-Shram portal in 2021 for registration and creation of a Comprehensive National Database of Unorganized Workers including gig workers and platform workers. 
  • It allows a person to register himself or herself on the portal on a self-declaration basis, which is spread across around 400 occupations.