Good news for the Indian contract workers

The code on Social Security, 2020 has for the very first time extended social security benefits like maternity leave, disability insurance, gratuity, health insurance and old age protection to workers in the country’s booming unorganized sector. 

These include gig workers, platform workers, contract workers, freelancers and home-based workers. It also stipulates the gratuity benefits to fixed-term employees without any conditions on minimum service. 

The code proposes the creation of a social security fund for extending these benefits to workers in the unorganized sector. 

The scheme for the social security fund envisages that the platforms and aggregators make contributions to the fund which would be either 1-2 percent of the turnover or 5 percent of the worker’s wages. Central and the state governments can also contribute to the social security fund. 

It integrates nine previous regulations relating to social security namely, 

The Employees Compensation Act, 1923. 

The Employees Provident Fund and Miscellaneous Provisions Act, 1952; 

The Employees State Insurance Act, 1948; T

Maternity Benefit Act, 1961; 

The unorganised workers’ Social Security Act, 2008; 

The Payment of Gratuity Act, 1972; 

The Employees Exchange Act, 1959; T

The Building and Other Construction Workers Cess Act, 1996 

The Cine Workers Welfare Fund Act, 1981

-Newspaper

The unorganised sector of India had tons of open challenges to address mainly around the renumeration for contract workers. The newly launched scheme is something I would call a life saver to many in this country. It is applicable to every type of occupation where the wage is based on quantity of work. 

A super driver in Ola or Uber or a delivery executive in Zomato, Swiggy will be most benefitted. 

If a Swiggy delivery executive fulfills an order, a very small portion of theit wage is putten to his security account and likewise for the drivers who are attached to different aggregators. 

Going forward, the employer of such contract workers are conditioned to abide the rule of adding a small chunk for the workers social security which wasn't there before. 

The country lacks awareness in the financial planning and the gig economy is vulnerable to such pandemics where some may fall into poverty before even they get to realise it. The loan and credit cards offered by different banks mainly for such gig workers encourages them to save litttle to nothing. Such an enforced security saving will surely be resulting in a healthy growth in the longer run similar to the white collar class who had EPF, PPF and so on.

Love,

Jeffry copps

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