Welfare Board and Fund for gig workers in Rajasthan

App-based e-commerce companies call them with the fancy name of ‘partners’ but pay them inadequate wages, make them work for long and irregular hours and provide them with no social security or even an insurance coverage in case of accidents. All that is set to change with the passage of the bill in the Rajasthan assembly, which will become law once the Governor signs it.

This is a trailblazer because soon all state governments will be forced to enact similar laws to provide some semblance of security to the gig workers who are keeping the wheels of e-commerce moving. India approximately has 77 lakh gig workers but the number is expected to grow to 21 million in the next few years.

While gig workers in the West are people who work part-time and on the side of some other job or studies, in India gig workers are full-time workers in the absence of employment opportunities. It has become the primary source of income for many families; But they are not deemed to be employees under the existing laws. The legislation in Rajasthan seeks to change their status, register them and ensure some degree of legal protection to conditions of their employment.

The legislation was apparently suggested to Rahul Gandhi by Nikhil Dey and other activists of the Mazdoor Kisan Shram Sangathan during the Rajasthan leg of the Bharat Jodo Yatra. The Congress leader had then asked chief minister Ashok Gehlot to explore the feasibility. In fact in its Karnataka manifesto too the Congress promised to create a Welfare Board and establish a Gig Workers’ Welfare Fund by allocating Rs 3000 crore as seed money. The manifesto promised “to mandate a minimum hourly wage for all gig and un-organised workers in domestic and personal care, logistics, food delivery, e-pharmacy, transportation and all other relevant sectors”.

Growing competition among service providers and e-commerce platforms, coupled with the availability of a cheap labour force have led to lower incentives for gig workers even as their workload and work hours have increased significantly relative to pay, which has also become insufficient for many. Growing number of flash strikes by gig workers also indicate deep dissatisfaction and harsh working conditions.

Platform workers in the transport sector in Thailand and Malaysia benefit from health and accident insurance as well as social security that is funded by consumers and aggregators, besides the state and service providers. Since Independence, construction workers, dock workers, and head loaders have had welfare boards set up for their well-being and welfare funds created by charging a cess. But most of them have not worked well on the ground. Hence the law alone may not change much unless its provisions are implemented well.

The Union government has also passed the Code on Social Security (one of four labour codes), which allows for some social security for gig workers, but once again the scheme has remained on paper without proper implementation.

The Rajasthan Platform-based Gig Workers Welfare Board will be a tripartite institution with representatives from bureaucracy, employers or clients, and workers’ unions or associations. The Board will create and monitor a “Social Security and Welfare Fund” comprising contributions made by individual workers, State government aids, other sources and a ‘welfare cess’ — a cut from each transaction — which the aggregator is required to pay.

The rate of the welfare cess will not exceed 2% nor fall short of 1% of the value of “each transaction,” and aggregators are required to submit the amount within the first five days of a month. The Bill provides for setting up a Central Transaction Information and Management System (CTIMS) that maps payments generated on platforms, recording commission charged, GST deducted, payment made to the worker, and welfare cess contributed by companies, among others.

Failure to deduct the cess and credit it to the fund will make ‘employing’ companies liable to be fined.