In a significant move to formalize social security for the rapidly expanding gig economy workforce, the Indian government has notified the Code on Social Security, 2020. This new framework mandates major digital platforms, including Amazon, Flipkart, Swiggy, and Zomato, to financially contribute to a dedicated welfare fund for their delivery and service partners.

New Social Security Framework

The implementation of the Code on Social Security brings millions of gig and platform workers—such as delivery personnel and drivers—under a formal welfare system for the first time. The new rules define “gig workers,” “platform workers,” and “aggregators” (the companies themselves), creating the legal basis for these protections.

Key features of the welfare schemes include:

• Financial Safety Net: Coverage for life insurance, disability insurance, accident insurance, and health and maternity benefits.
• Retirement Support: Access to old-age protection and provident fund schemes.
• Portable Benefits: Workers will be registered on a national database using an Aadhaar-linked Universal Account Number (UAN), allowing benefits to be accessed regardless of state or job changes—a crucial feature for mobile gig workers.
• Accident Coverage: Accidents occurring during the commute between a worker’s home and workplace will now be categorized as employment-related accidents.

Aggregator Contributions

To finance these protections, the Code establishes a Social Security Fund that will receive contributions from central and state governments, corporate social responsibility (CSR) initiatives, and fines.

Crucially, digital aggregators are required to contribute a percentage of their revenue to this fund:

• Contribution Rate: Companies like Amazon, Flipkart, Swiggy, and Zomato must contribute between 1 and 2 per cent of their annual turnover derived from transactions with gig workers.
• Contribution Cap: The total annual contribution from an aggregator is capped at 5 per cent of the amount they pay out to the workers.

Experts noted that this reform officially recognizes the economic role of gig workers, granting them basic rights like mandatory appointment letters, portable provident fund contributions, and pension eligibility, regardless of continuous employment with a single platform.

The National Social Security Board will oversee the implementation and monitoring of these schemes. According to the Niti Aayog, the gig economy sector in India is projected to employ 2.35 crore (23.5 million) people by 2029–30, making the introduction of this protective legislation highly significant.