India is the fifth-largest economy for gig or platform workers. By 2024, the sector is estimated to be worth $455 Billion, with a compound annual growth rate of 17%. Aided by the pandemic, the gig economy is increasingly becoming a popular option, but as a new report from Fairwork highlights – at the cost of better working conditions.
Globally, gig workers have traditionally been excluded from benefits like employee healthcare plans, paid time off, bonuses, and other perks. They have not had access to the same working conditions as full-time workers. However, there has been a slow movement to amend that. In India too, the Central Government has recognized the need for change and introduced the Code on Social Security, 2020.
While the code is yet to fully take effect, platforms have been caught providing poorer not better working conditions to their workers. That comes at a massive cost to India’s labor force, who are forced to work longer and harder without the same levels of protection as full-time workers.
Current State of Gig Workers
Fairwork’s Labour Standards in the Platform Economy has highlighted the urgent need for better working conditions for gig workers. The potential of high wages and shorter payout cycles continues to draw millions into gig work, despite its well-documented issues, low pay being the biggest among them. The Fairwork report noted that “there was insufficient evidence that workers on seven of the eleven platforms earned the minimum wage rate after accounting for costs.”
Pay aside, gig workers are also missing out on basic benefits like social security. Even if they did exist, complex layers of subcontractors and accessibility meant that workers had little knowledge of their benefits. As the report put it: “workers were often unclear who was responsible for their working conditions and for the payment of wages,” leaving them stuck with their working conditions.
Need for Better Working Conditions
The shocking report points to one thing: millions of Indians are missing out on their basic rights in a rush to make money quickly. Of course, digital platforms cannot alone be blamed. While there is no reliable data for the number of gig economy workers, A NITI Ayog report from 2019 asserted that app-based cab companies had created more than 2 million jobs.
It is a systemic issue, not just in India but globally. Gig workers are forced to suffer long hours and a lack of benefits, under the illusion of good pay. Such jobs fail to pass the test for what the International Labour Organization (ILO) calls “decent work”.
That is because most gig workers are not considered employees, but rather independent contractors. That classification means that companies have no legal obligation to provide healthcare benefits or other social security benefits.
That matters, as the ILO has recognized. The body found that “a full 700 million people are living in extreme or moderate poverty despite having employment.” Not only is securing a regular income a challenge but so is getting access to basic healthcare. The World Health Organization noted that “Work-related health problems result in an economic loss of 4–6% of GDP for most countries.”
Basic employee health coverage is the need of the hour, followed by other social security programs. Yet, it still remains elusive for many gig workers.
Winds of Change
There is, however, a strong indication that things are changing. In September, the Central Government passed The Code on Social Security, 2020 to include gig workers in social security schemes. Companies will now have to contribute 1-2% of their annual turnover, along with contributions from the State and Central government for gig workers’ benefits.
The wide-ranging code covers everything from social security to information on such schemes. Gig workers will also have access to benefits under the Employees State Insurance Corporation (ESIC). With the code, the government aims to provide better working conditions to gig workers.
However, the onus is still on companies to take up social security and healthcare programs for their workers, even those who aren’t contracted full-time. The challenge though is that providing benefits to such workers has always been seen as an unsustainable business practice since gig workers come with a high attrition rate.
InvestIndia, the government’s national investment promotion website highlighted the same. The website says “there is a need to strike a balance between flexibility and security. One solution could be to promote platforms which are in the business of offering such benefits to gig/ contingent workers.”
That’s why Onsurity was founded. Our vision is to create simplified healthcare products for those with limited access to them. We understand that startups and SMEs may not have the budgets to afford group health insurance even for full-time workers. With Onsurity’s affordable employee healthcare plans, companies can extend benefits to not just full-time, but part-time and gig workers as well. That way, you create better working conditions for everyone.
We believe healthcare should be a basic right for everyone, irrespective of their employment status. That’s why we are working hard to provide employee healthcare for startups and SMEs. We want to see better working conditions for everyone and have found a way to make it financially-friendly.
With Onsurity, not only are you helping a gig worker get healthcare benefits, but also help ensure your company doesn’t score poorly on Fairwork’s report. Set the standard for other businesses in India with Onsurity as your healthcare partner.