Published On: August 27th 2025
Authored By: Kumari Rupa
Faculty of Law, University of Lucknow
Abstract
This article examines how the gig economy has flourished in India, and the legal murkiness around gig workers. It explains what gig work is and charts how fast it is growing, especially since COVID-19. It then analyses the extent to which key labour laws and the Code on Social Security, 2020 regulate or overlook gig and platform workers. We look at court decisions overseas and union initiatives at home, before detailing the real-world conditions faced by gig workers- unpredictable pay, no leave, algorithmic control and poor bargaining power. Recent efforts from the E-Shram portal to Rajasthan’s ground-breaking welfare law are also assessed. And finally, we propose reforms: a specific statutory status for gig workers, minimal standards for pay and hours, mandatory contributions to social security funds by platforms, and recognition of collective representation. Ensuring the welfare of gig workers is important, not only to promote social justice but to maintain a burgeoning digital economy.
Introduction
The gig economy is digital platform-mediated work, rather than long-term contracts, it has fundamentally changed how millions earn a living. Food delivery riders, ride-hail drivers, freelance designers and others cherish the flexibility the app provides. Yet that flexibility can carry a price that is no guaranteed work hours, no paid leave, no retirement savings, no minimum wage. In India, labour laws are based on a binary “employee” and “self-employed,” which puts gig workers in a grey area. The crux of the problem is that there is a discordance between contemporary platform-mediated work and outdated labour laws. This article discusses this ambiguous legal status, the social security voids that result from that status, and a recent attempt to address these shortcomings through legislation and policy to extend labour protections to this expanding workforce. It doesn’t shy away from court precedents, state-level innovation and paths to reform.
Who Are Gig Workers?
“Gig workers” are paid for each task or assignment, often on online platforms.[1] They span a wide spectrum:
- Platform workers like Swiggy and Zomato delivery riders, Uber and Ola drivers, urban cleaners working on Urban Company, nursing assistants on Care24[2];
- Providers on platforms such as Upwork, Freelancer and Fiverr;
- Other gig economy workers who take side jobs like part-time event staff workers, manual movers and home services workers paid per job.
What these businesses have in common is the absence of conventional employer-employee relationships. Instead, workers are “partners” or “contractors” paid by the job. This is in contrast to salaried employees who get wages and statutory benefits like paid leave, provident fund, gratuity, maternity cover as well as dispute-resolution avenues and termination protection.
Growth of the Gig Economy in India
The gig economy in India was estimated to comprise 7.7 million workers for 2020-21, or 2.6 per cent of the non-agricultural work force, and expected to increase to 23.5 million (6.7 per cent) by 2029-30.[3] Much of this surge can be attributed to the availability of smartphones (in excess of 750 million internet users by 2022), along with the march of urbanisation and escalating appetites for on-demand services.[4] Key players include:
Food delivery: Swiggy, Zomato, Dunzo;
Ride-hailing: Uber, Ola;
Home services: Urban Company, Housejoy;
Freelance marketplaces: Upwork, Fiverr, Freelancer.
The pandemic also expedited the move to digital consumption, leading platforms to step up hiring to keep up with the surge in demand for contactless deliveries and remote services. A 2022 report by NITI Aayog estimates that the gig economy will add more than 2 per cent to India’s GDP by 2025 and notes its economic importance.[5]
Legal Classification: Employee vs. Independent Contractor
Classification dictates who is eligible for minimum wages, social security, workmen’s compensation, and a whole slew of other rights. According to an employee-employer relationship model, the employer does assume the economic risk, contributes to statutory funds, and is subject to inspection and compliance regimes. Platforms, by contrast, transfer all the risk onto workers. They categorize gig workers as either “independent contractors” or “service providers,” putting them beyond the scope of labour laws meant for traditional employees.[6]
This misclassification has profound consequences:
- No minimum wage: Platforms set per-task rates, which are sometimes below the legal minima.[7]
- No social security: No provident fund, no employee state insurance or gratuity.
- No dispute-resolution: There are no labour courts or any tribunals through which workers can seek redress.
- Lack of collective bargaining: The ‘partner’ status precludes recognition of unions under the Trade Unions Act 1926.[8]
The result is a race to the bottom: Platforms vie with one another to do everything they can to pound worker costs down, which in turn results in exploitative pay and work conditions.
Existing Labour Law Framework in India
Key labour laws such as the Minimum Wages Act 1948, the Industrial Disputes Act 1947, the Employees’ Compensation Act 1923 are structured on an employer-employee framework. Independent contractors, including gig economy workers, are not included.[9] For example, the Minimum Wages Act applies only to ‘employees’ in scheduled employments; the Industrial Disputes Act covers only ‘workmen’ in establishments employing 100-plus workers.[10]
Code of Social Security, 2020
The Code on Social Security, 2020 is the first statute to specifically describe gig and platform workers. Key provisions include:
- Definitions: “Gig worker” means an individual who operates or works in the gig or any other form of platform-based work organisation and generates income while working independently of the traditional employer–employee relationship (s 2(35)). “Platform worker” is a person who performs or carries out platform work as defined (s 2(61)); “platform work” is work that is organised via an online platform and remunerated through it (s 2(60)).
- Enrolment: Required for the access of social welfare programmes (ch VI).
- National Social Security Board: To recommend such schemes for different groups of employees (s 115).
- Funding: Aggregators have to contribute 1-2% of turnover to welfare funds, central and state governments chip in, and worker contributions might be notified (ss114,141).
- Schemes: Life and disability insurance, health and maternity protection, old-age protection, and more (chs VII–IX).[11]
Although revolutionary, the Code does not eliminate the contractor classification. It doesn’t establish claims to things like minimum wage or remedies for disputes. Critics say that social protection is simply not equal to complete labour protection.
Court Cases and Policy Debates
India has yet to pass any landmark rulings on gig classification, but the debates are simmering. In Uber BV v Aslam [2021] UKSC5, the UK Supreme Court ruled that Uber drivers were “workers” and could claim the national minimum wage and paid holiday.[12] This set a precedent, and vigorous debate in Indian legal fraternity and petitions before different High Courts of the country asking for the same status for Indian drivers.
In 2022, the Delhi Gig and Platform Workers Union filed a PIL in the Delhi High Court, contending that the Social Security Code’s assurances have not been fulfilled and pressing for immediate protection in the form of a decent minimum wage floor and accident insurance.[13] Efforts to unionise have made headway: the All India Gig Workers Union and other collectives have started registering members, holding rallies and bargaining with platforms for higher pay and better conditions.[14] In the Parliamentary and Ministry of Labour and Employment (MoLE) policy discussions, there is a tension over history – between a concern to maintain the flexibility of a platform model and movements to extend statutory protection.
Challenges Faced by Gig Workers
- Low and unpredictable earnings- Compensation often varies according to demand, supply and algorithms for surge pricing and platform incentives, resulting in income instability.[15]
- No paid leave or insurance- A period of sickness or a freak accident means forgoing the pay packet, too; medical emergencies can force workers into debt.[16]
- Algorithmic control- Apps determine performance goals, ratings, and de-activation cut‐offs with minimal transparency or appeal.[17]
- Lack of collective bargaining- “Partner” framing impedes union recognition. The threat of de-activation tends to discourage joint action.
These situations only intensify the precarity, mental strain and economic insecurity.
Recent Developments and Government Steps
E-Shram Portal
E-Shram, launched in August 2021, aims to register unorganised workers such as gig and platform workers for universal social security and welfare. As of April 2025, more than 307 million workers had signed up, with approximately 1 million parsing themselves as gig workers.[18] Registered workers are eligible for various schemes including Pradhan Mantri Jan Arogya Yojana, Pradhan Mantri Shram Yogi Maan-Dhan Yojana, and life and accident insurance under PMSBY and PMJJBY.[19]
Rajasthan Platform Based Gig Workers (Registration and Welfare) Act, 2023
Rajasthan was the first state to pass a dedicated gig welfare law. It mandates:
- Registration of gig workers and aggregators;
- A state welfare fund paid for by modest fees per transaction on aggregators;
- Welfare board to monitor education, health, skill development and accident relief;
- Penalties of up to ₹50 lakh by platforms.[20]
Karnataka, West Bengal, and Tamil Nadu are looking at similar models, indicating a move towards state-level labour innovation.
Social Security Code Implementation
Draft rules under the Code have been notified by the Central Government, however there has been no real implementation of schemes (in particular, aggregator contributions). Workshops and stakeholder discussions continue to develop implementation details and IT tooling.
What Needs to Change?
To make gig work fair and sustainable, reforms must address:
- A new statutory category– Establish “digital workers” within the framework of labor law, with minimum wage, hours restrictions, paid leave and dispute resolution rights.
- Platform accountability- Mandate transparent algorithms and grievance redressal; bandwidth tax; platforms to deposit a fixed percentage of gross revenue into social security and insurance pools.
- Fair algorithmic practices- Enshrine into law the right to an explanation of a rating, de-platforming or task-allocation decision; create appeals panels.
- Collective representation- Make these gig-worker unions or councils ‘recognized’ under the Trade Unions Act and allow the possibility of sectoral collective bargaining to emerge.
- Integrated welfare access- Link E-Shram, social security boards and labour inspectorates across the country through a common digital platform; provide portability of benefits to migrant workers.
- Periodic review- Form a standing committee made up of labour experts, platform representatives and worker bodies to biennially review the labour standards for workers in the gig economy.
Surely such proposals would strike the balance between flexibility and security, provide a valuable incentive for tech platforms to behave responsibly and give a leg up to workers.
Conclusion
Gig workers power the digital platforms economy, but legal protections have not caught up with technology. India’s new Social Security Code and the innovative state laws are therefore moving in the right direction, though that does not mean they grant labour full rights. Without a clear definition of employment, mandatory benefits, algorithmic accountability, and the right to collective bargaining, gig workers are still in the lurch. We need a broad-based framework to protect dignity, financial security and voice in order to have a fair and resilient platform economy. Ensuring the protection of gig workers is not simply a moral obligation, it is crucial to preserving innovation, economic growth and social stability in India’s digital future.
References
[1] NITI Aayog, India’s Booming Gig and Platform Economy (2022) https://www.niti.gov.in accessed 10 July 2025.
[2] Ministry of Labour & Employment, E-Shram Portal (2021-2025) https://eshram.gov.in accessed 10 July 2025.
[3] NITI Aayog (n 1) 3.
[4] Telecom Regulatory Authority of India, ‘Indian Telecom Services Performance Indicators’ (2022) https://trai.gov.in accessed 10 July 2025.
[5] NITI Aayog (n 1) 7.
[6] The Indian Express, ‘Lack of benefits: gig workers outside traditional employer-employee relationship’ (28 June 2022) https://indianexpress.com/article/explained/niti-aayog-india-gig-economy-7995223/ accessed 10 July 2025.
[7] Minimum Wages Act 1948, s 3.
[8] Trade Unions Act 1926, s 2(h).
[9] Industrial Disputes Act 1947.
[10] ID Act § 2(s), § 2(xx).
[11] Code on Social Security, 2020, ss 2(35), 2(60), 2(61), ch VI–IX.
[12] Uber BV v Aslam [2021] UKSC 5.
[13] Delhi Gig and Platform Workers Union v Govt of NCT Delhi (PIL, 2022).
[14] All India Gig Workers Union registrations (2024).
[15] Wired, ‘Gig Workers Are Being Stabbed, Stoned, and Abused in India’ (12 April 2023) https://www.wired.com/story/india-gig-workers-violence-deadly-attacks accessed 10 July 2025.
[16] WHO, ‘Occupational Health and Safety in the Gig Economy’ (2021) https://www.who.int accessed 10 July 2025.
[17] Centre for Internet Society, Algorithmic Management in India’s Gig Economy (2023) https://cis-india.org accessed 10 July 2025.
[18] Ministry of Labour & Employment (n 2).
[19] Gazette of India, Pradhan Mantri Shram Yogi Maan-Dhan Yojana (2019) https://egazette.nic.in accessed 10 July 2025.
[20] Rajasthan Platform Based Gig Workers (Registration and Welfare) Act, 2023.
