LABOUR LAWS - Gig Workers and Their Legal Framework in India

Introduction.

Every year, May 1st reminds us of the struggles and victories of workers worldwide. Governments and industries mark the day with events and tributes. But how many of us, on a personal level, truly acknowledge those who keep our daily lives running?
Do we offer a paid day off to the domestic worker who cleans our homes? Do we even know the name of the man who washes our cars before sunrise or the cook who serves meals while battling her own exhaustion?
App-based delivery workers have become essential—bringing food, groceries, and medicines at lightning speed. With a tap on a screen, we summon beauticians, electricians, and plumbers to our doors—services once unthinkable with such ease.
Yet, these workers connected to us by the Internet and convenience remain excluded from the labour rights we celebrate. Despite their central role in modern life, they still operate in the shadows of our legal framework.

Who Are Gig Workers?

In India, "gig workers" are broadly defined as persons earning income outside the traditional employer–employee relationship. The Code on Social Security, 2020 (a national labour law reform) explicitly recognizes a gig worker as "a person who performs work or participates in a work arrangement and earns from such activities outside of traditional employer–employee relationships".

Gig work takes many forms, but it can be grouped into two main categories:

Platform-based workers: Those who obtain jobs or contracts through online apps or digital platforms. Examples include ride-hailing drivers (e.g. Uber, Ola), delivery couriers (food, groceries or parcels for Zomato, Swiggy, Amazon, etc.), and home/errand services (e.g. appliance repair, salon services, household help booked via apps). These workers rely on smartphones and algorithms to receive tasks.

Non-platform gig workers: Those who engage in short-term or piece-rate work outside formal employment but not via a digital app. This can include casual construction helpers, migrant daily wage labourers hired for specific projects, or freelance professionals (e.g. consultants, part-time lecturers) who take on temporary contracts..

Importantly, nearly all gig workers in India are treated as independent contractors under existing laws Many platforms call them “partners” or “micro-entrepreneurs,” but legally they lack employee status. Unlike formal employees, gig workers typically have no guaranteed hours or fixed salary, and they bear most commercial risk themselves. In practice, this means they do not enjoy statutory rights afforded to regular workers.

Role of Gig Workers in the Indian Economy: Gig work is becoming a major part of India’s economy. By 2020–21, gig workers made up 2.6% of the non-agricultural workforce, and this is expected to rise to 6.7% by 2029–30, with over 23 million workers. Around 60% are in transport and retail, including 2.28 million shop salespersons and 1.3 million drivers. Other sectors like manufacturing, finance, and IT also have a significant number of gig workers, including freelancers in coding, design, and consulting. Major categories include ride-hailing (Ola, Uber), delivery (Swiggy, Amazon), retail assistants, home services (Urban Company), and digital freelancing. The gig economy not only provides flexible employment but also contributes to growth potentially creating 90 million jobs and increasing GDP by 1.25%. With nearly half of Indian companies already hiring gig workers, India is emerging as a global leader in flexible staffing.

Laws Applicable to Gig Workers: Gig workers in India have historically lacked legal protection, as traditional labour laws like the Industrial Disputes Act and Minimum Wages Act only apply to formal employees. The first major step came with the Code on Social Security, 2020, which defines gig and platform workers and allows the government to create welfare schemes for them (insurance, pensions, health benefits, etc.). However, implementation is slow, with no central rules or mandatory platform contributions. Some states have stepped in: Rajasthan enacted the first gig worker law in 2023, setting up a welfare board and a cess-funded social security system. Karnataka followed in 2024 with a 1.5% welfare cess, mandatory registration, grievance redressal, and strong penalties. Tamil Nadu and Telangana are also developing similar systems. At the national level, the government plans to operationalize the Code with pilot schemes and platform contributions to EPS. These moves aim to secure benefits for gig workers without formally reclassifying them as employees.

Rights of Gig Workers

Included Rights Under the emerging legal framework, gig workers are gaining certain entitlements, mainly in the form of welfare benefits rather than full employment rights. Key provisions include social security and insurance such as life, disability, health, and pension schemes under the national Social Security Code. States like Karnataka and Tamil Nadu have already introduced accidental insurance schemes for registered gig workers. Additionally, contributory pension proposals (EPS) could extend retirement benefits to them.
Mandatory registration and issuance of unique IDs through state or national portals (like e-Shram) make workers eligible for these benefits and other programs. States like Karnataka have also introduced grievance redressal systems, including online complaint mechanisms and clear rules on deactivation or contract changes. Some laws require platforms to disclose how algorithms and performance ratings work, enhancing transparency.

Excluded Rights However, despite these protections, gig workers remain excluded from core labour rights. As independent contractors, they are not covered under laws like the Minimum Wages Act or the Industrial Disputes Act. This means they have no guaranteed minimum pay, paid leave, PF/ESI, bonuses, or job security. They also lack the legal right to unionize or bargain collectively, and most traditional labour laws do not apply to them.
In short, gig workers are beginning to receive social security benefits, but still lack key employment protections due to their non-employee classification.

Suggestions and Needed Reforms
To bridge the protection gap for gig workers, several key reforms have been proposed:
Create a new legal category: India could introduce an intermediate status like the UK's “worker” category, recognizing gig workers as “dependent contractors” or “platform workers.” This would grant them rights like minimum wage, holiday pay, and basic insurance without full employee classification.
Guarantee minimum wages and hours: Legally enforce a base pay rate per task or hour, with overtime pay and compensation for cancellations. States like Karnataka have already proposed Such measures.
Mandate platform contributions: Platforms should be required to contribute to social security (e.g., PF, pension) from each gig payment. Welfare funds and safety subsidies, like those in Gujarat and Rajasthan, need legal backing through mandatory levies. Ensure health and safety: Platforms must provide safety gear, first-aid kits, and medical cover for on-duty accidents. Broader occupational health risks like stress and exposure must also be addressed.
Enable collective representation: Gig workers should be allowed to form unions, cooperatives, or worker councils. National laws must explicitly permit this, ensuring workers have a voice in negotiations.
Regulate algorithmic management: Platforms must inform workers of any changes to pay models or rating systems in advance. Rules should also require transparency in deactivation decisions and allow appeals, as seen in the EU’s 2024 Platform Work Directive. Strengthen law enforcement. The labour ministry must activate rules under the Social Security Code and raise awareness through portals like e-Shram. Improved data collection is essential for better oversight and inclusion.

Conclusion
India’s gig economy is booming and offers new opportunities, but it also exposes systemic vulnerabilities. Gig workers contribute significantly across transport, delivery, services and digital sectors, yet today most lack even minimum statutory protections. The emerging legal framework (the Social Security Code, Rajasthan’s Act, Karnataka’s Bill and others) is a welcome start, recognizing gig workers and providing a mechanism for welfare benefits. However, many key rights (minimum wage, leave, PF/ESI, dispute resolution) remain out of reach. It is now critical that policymakers build on these foundations by creating an appropriate legal status for gig workers, enforcing mandatory social security contributions, and guaranteeing core labour rights. Evolving the law to “balance flexibility with fair protection” will ensure that the millions of Indians who plug into the gig economy can work with dignity and security, without stifling innovation