Gig Economy and Recent Developments in Karnataka

Why in the News?

The Karnataka government recently published the draft Karnataka Platform-based Gig Workers (Social Security and Welfare) Bill, which aims to address the welfare and rights of gig workers in the state. This bill is part of a broader trend to improve social security for gig economy workers.

About the Bill

 Welfare Board:

• Establishment: The bill proposes the creation of a 'Welfare Board' at the state level dedicated to securing the welfare of gig workers.
• Functions: The board would be responsible for overseeing and implementing welfare measures specifically tailored for gig workers.

Welfare Fund:

• Composition: The fund will be established from a welfare fee levied on transactions between gig workers and aggregators, as well as contributions from both Union and State governments.
• Purpose: This fund aims to provide financial support and social security benefits to gig workers.

Rights-Based Provisions:

• Protection of Rights: The bill is designed to safeguard the rights of gig workers, including their social security, occupational health, and safety.
• Obligations on Aggregators: Aggregators (platforms) will have specific obligations related to the welfare and treatment of gig workers.

Additional Features:

• Safeguards Against Unfair Dismissals: The bill includes provisions to protect gig workers from unjust terminations.
• Grievance Redressal Mechanism: It establishes a two-tier grievance redressal system to address issues faced by gig workers.
• Transparency: The bill mandates transparency in automated monitoring and decision-making systems used by platforms.

Issues with the Bill

Disclosure of Algorithmic Monitoring:

• Impact on Business: Requiring disclosure of algorithmic monitoring and reasons for terminations could potentially complicate business operations and affect the ease of doing business.

Minimum Wages and Working Hours:

• Absence of Regulation: The bill does not address crucial issues like minimum wages or working hours for gig workers, which are essential for ensuring fair compensation and working conditions.

Welfare Board Model:

• Limited Scope: While the welfare board provides some benefits, it does not fully replace institutional social security benefits such as provident fund, gratuity, or maternity benefits.

Scope of Regulation:

• Subset of Workers: Unlike the Code on Social Security, 2020 (COSS), which defines and regulates both gig workers and platform workers separately, the Karnataka Bill focuses only on platform-based gig workers. This narrower focus may limit the bill's overall effectiveness in addressing the needs of all gig economy participants.

Comparative Context

Rajasthan’s Legislation:

• Pioneering Approach: Rajasthan is currently the only state with legislation specifically addressing the welfare of gig workers, setting a precedent in the area of gig worker rights and benefits.

Code on Social Security, 2020 (COSS):

• Broad Framework: The COSS provides a more comprehensive framework by regulating both gig workers and platform workers, which may offer a more robust approach compared to state-specific legislation.

Gig Workers and Policy Initiatives

Definition and Categories of Gig Workers

Definition:

• Code on Social Security, 2020: Gig workers are defined as individuals who perform work or participate in a work arrangement and earn from such activities outside of the traditional employer-employee relationship.

Categories:

• Platform-Based Gig Workers: These individuals work through online software apps or digital platforms. Examples: Delivery workers for companies like Zomato or Uber.
• Non-Platform-Based Gig Workers: These include casual wage workers in conventional sectors, either part-time or full-time. Examples: Domestic workers, freelance artisans.

Drivers of Growth in the Gig Economy

• Technological Advancements: Innovations in digital platforms and apps have enabled the growth of gig work.
• Urbanization: Increased urbanization has created a demand for on-demand services.
• Rising Middle-Class Consumption: Growing consumer demands for flexible services.
• Shifts in Consumer Preferences: A trend towards on-demand and convenience-based services.
• Work-Life Balance: Workers seeking greater flexibility in their work arrangements.

Challenges for Gig Workers

• Digital Divide:
• Issue: Unequal access to internet services and digital technologies.
• Impact: Limits the opportunities available to gig workers, especially in rural or underdeveloped areas.
• Data Protection:
• Issue: Lack of transparency in how platform companies collect, store, and share personal data.
• Impact: Affects the right to privacy of workers.
• Lack of Employee Status:
• Issue: Gig workers are not considered employees under traditional labor laws.
• Impact: Results in challenges such as the inability to form unions and potential exploitation.
• Uncertain Nature of Jobs:
• Issue: Job security and regularity of wages are often unpredictable.
• Impact: Creates financial instability for gig workers.
• Lack of Social Protection:
• Issue: Absence of traditional employment benefits like health insurance and provident fund.
• Impact: Workers lack crucial safety nets.
• Algorithmic Management:
• Issue: Workers are subject to performance evaluations based on algorithms and ratings.
• Impact: Can lead to stress and pressures related to job performance.

Steps Taken for Gig Economy in India

• Code on Social Security, 2020:
• Provision: Extends social security benefits to gig workers.
• Code on Wages, 2019:
• Provision: Establishes a universal minimum wage and floor wage applicable to both organized and unorganized sectors, including gig workers.
• e-SHRAM Portal:
• Function: A national database for unorganized workers, including gig workers.
• Pradhan Mantri Suraksha Bima Yojana (PMSBY):
• Benefit: Provides accidental insurance cover of Rs. 2 lakh per year for eligible registered unorganized workers, including gig workers.
• Collaboration with National Law School of India University (NLSUI):
• Purpose: Assisting in the development of new schemes for gig and platform workers.
• Partnership: MoU with Employees Provident Fund Organisation (EPFO).

Way Forward

• Proper Estimation of Gig Workers:
• Action: Conduct separate enumeration exercises to accurately assess the number of gig workers.
• Catalyze Platformization:
• Proposal: Introduce initiatives like "Platform India" to support self-employed individuals in accessing broader markets.
• Accelerate Financial Inclusion:
• Action: Provide institutional credit to vulnerable gig workers through tailored financial products, leveraging FinTech innovations.
• Enhancing Social Inclusion in the Digital Economy:
• Action: Enable access for diverse groups, including women and persons with disabilities, through skill development and financial support.
• Skill Development for Platform Jobs:
• Action: Implement outcome-based, platform-led models for skilling and job creation.
• Integration: Combine employment and skill development portals with ASEEM portal for comprehensive support.
• Universal Social Security Coverage:
• Action: Extend social security measures, including paid sick leave, insurance, and pension plans, as outlined in the Code on Social Security 2020.
• Tripartite Dialogue:
• Action: Foster discussions among governments, platform unions, and employer bodies on labor issues and worker well-being in the platform economy.