Legal Status of Gig Workers in India: Labour Protections in the Platform Economy

A Critical Analysis of Emerging Legal Frameworks and Policy Challenges in the Digital Age

Abstract

In recent years, the growth of services offered through online platforms has given rise to a new category of workers known as gig workers or platform workers. As this is an emerging concept, developing appropriate legal protections requires extensive deliberation among lawmakers. Currently, there are limited laws in place to safeguard the rights of gig workers in Indian society. This article aims to conduct a critical analysis of the current legal status of gig workers in our economy and examine the steps taken by the government to protect the rights of gig workers in Indian society. Furthermore, this article will also examine actions that can be taken by the government to protect the rights of gig workers in our growing economy.

Keywords: Gig worker, Platform worker, Legal status

1. Introduction and Background of the Study

The rapid advancement of technology and the spread of digital platforms have transformed the nature of work across the globe. The basic definition of a gig worker is an individual who is engaged in the gig economy, taking on flexible or temporary work instead of traditional employment. According to the NITI Aayog report (2022), “Gig workers can be broadly classified into platform and non-platform-based workers.”¹ This classification by NITI Aayog further helps us better understand the different needs required for specific types of gig workers.

In India, the gig economy is expanding rapidly, causing a rise in gig workers. As per the NITI Aayog (2022) report titled India’s Booming Gig and Platform Economy, India’s gig workforce is projected to grow significantly, reaching an estimated 2.35 crore workers by 2029-30.² The report also highlights that in 2020-21, approximately 77 lakh (7.7 million) workers were already engaged in the gig economy.³

The ongoing rise in gig workers has made it urgent for us to develop laws to protect the rights of these workers, as their rights are being exploited due to a lack of protection from traditional labor laws in India. Recognition of these challenges has led to the formation and implementation of the Code on Social Security 2020, which seeks to provide some benefits to gig workers. However, the practical implementation of these protections remains uncertain and fragmented.

This article critically examines and seeks to understand the current legal status of gig workers in the Indian economy. We will focus on gaps present in the current legal framework created for gig workers and propose possible solutions that will help protect the basic rights of gig workers in India.

2. Concept of Gig and Platform Work in India

In the Indian legal context, gig workers are temporary workers whose job schedules are flexible, and their names are not included in the permanent employee list. According to the NITI Aayog 2022 report, “Gig workers can be broadly classified into platform and non-platform-based workers.”⁴ According to this classification, platform workers are workers who utilize online algorithmic matching platforms like Uber or Amazon, while non-platform workers perform tasks that are technologically independent, such as construction jobs or day jobs.

These distinctions are crucial for policymaking and legal protection, as the working conditions for both groups differ significantly. According to the Fairwork India 2022 report, many platform workers face issues such as unfair pay, lack of contracts, excessive working hours, and limited access to grievance redressal mechanisms.⁵ Non-platform workers, on the other hand, struggle with informal employment relationships, lack of written contracts, irregular payments, and minimal occupational safety standards.⁶

However, both platform and non-platform workers have to deal with the same issues, such as lack of job security, overtime work, lack of incentives, irregular payments, and minimal occupational standards. Therefore, it is important that there should be laws that protect their basic rights, as there is a continuous introduction of new policies by the gig economy that attempt to exploit workers for brand recognition and profit.

3. Legal Framework Governing Gig Workers

India’s current labor law does not provide proper recognition to gig workers, as India has adopted a binary classification of workers: employee or independent contractor. This rigid classification has excluded gig workers completely. However, recent efforts by lawmakers aim to introduce laws that protect the rights of these workers.

3.1 Existing Indian Labour Laws and Their Applicability

The major existing laws for traditional employees are:

• The Minimum Wages Act 1948
• The Industrial Disputes Act 1947
• The Employee State Insurance Act 1948

These laws generally do not apply to gig workers, who operate independently and are not under the “master-servant” or “employer-employee” relationship required by traditional labor statutes.⁷ Due to this reason, gig workers are often denied access to basic labor rights, which poses a great risk to their job safety and security.

3.2 The Code on Social Security, 2020: Key Provisions

The Code on Social Security 2020 is the first legal provision that defines and caters to the needs of gig workers. The following are the key provisions:

Section 2(35) defines 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 relationship.”⁸

Section 2(61) defines a platform worker as “a person engaged in or undertaking platform work.” Platform work itself is explained as service arrangements “outside of a traditional employer-employee relationship in which organizations or individuals use an online platform to access other organizations or individuals to solve specific problems or to provide specific services…”⁹

Chapter IX (Sections 109-114) empowers the central and state governments to frame welfare schemes for gig and platform workers, including:

• Life and disability cover
• Accident insurance
• Health and maternity benefits
• Old age protection and crèche facilities
• Other benefits as prescribed¹⁰

4. Gaps and Challenges in the Current Legal Framework

While the current provisions under the Code on Social Security, 2020 provide definitions for gig workers, they fail to provide a sense of job security and other essential rights that are secured for traditional workers. The following challenges still persist in the current legal framework when it comes to gig workers:

Lack of clarity regarding employment status: Although gig workers have not been categorized as part of the traditional employer-employee relationship, the law fails to provide a clear understanding of whether they are entitled to the same rights as traditional employees.

Issues in social security coverage: The Code on Social Security, 2020 has created provisions to formulate schemes that would provide benefits to workers that they are deprived of. Yet, these schemes are not legally enforceable, and actual implementation at the state level has been slow.¹¹

Enforcement barriers: There is no legal authority tasked with ensuring rights and benefits for gig workers; hence, most workers are unaware of their legal entitlements. There is also a lack of practical enforcement of the current legal provisions, as the working hours of gig workers vary, making it difficult to enforce these provisions. Furthermore, many workers refuse to register themselves due to fear of losing their jobs or lack of trust in the government.

5. Judicial and Policy Developments

This section discusses judicial developments concerning gig workers in India:

Case Laws: Indian courts have started to acknowledge the importance of the gig economy, though there is no major legal judgment given by the Supreme Court. One of the first cases taken to the Delhi High Court was Delhi Gig Workers Union v Union of India, which is still pending to this day. This case challenged the lack of social security protection and seeks enforcement of rights under the code.¹²

Government Initiatives: The Rajasthan Platform-Based Gig Workers (Registration and Welfare) Act, 2023 is the first state-level law that mandates registration of platform workers and creation of a welfare board funded by aggregator contributions. Other states like Karnataka and Maharashtra have also formulated such laws but have not yet implemented them.

NITI Aayog Recommendations: In its 2022 report, NITI Aayog recommended universal registration of all gig workers, mandatory contributions by platforms to a welfare fund, and the development of model contracts for gig workers.¹³ These recommendations are advisory in nature and have not yet been translated into national policy.

6. International Comparative Perspective

Problems regarding the recognition of the legal status of gig workers persist across nations. Let us examine how other countries have addressed these challenges:

United Kingdom: In Uber BV v Aslam [2021] UKSC 5, the UK Supreme Court held that Uber drivers are “workers” under the Employment Rights Act 1996, which grants them minimum wage, paid holiday, and protection from unfair treatment.¹⁴

The European Union: The EU proposed a Platform Work Directive (2021) that mandates algorithmic transparency and collective bargaining, which will further ensure a fair working environment.

The United States: In the US, the legal status of platform workers differs from state to state. At the federal level, the U.S. Department of Labor has proposed narrowing independent contractor definitions, aiming to curb misclassification.¹⁵

7. Conclusion and Recommendations

In conclusion, India’s platform economy is growing rapidly, but the laws currently in place to regulate the platform economy are fragmented and inadequate. The Code on Social Security 2020 gives hope that lawmakers have taken steps to recognize the rights of gig workers, but these provisions fail to provide clarity in terms of employment status and practical enforceability. India should consider adopting certain policies from other countries; for example, the UK recognizes a third category of gig workers, the EU promotes a presumption of employment and algorithmic transparency, and the US is developing evolving laws aimed at safeguarding the rights of gig workers.

It is recommended that India also create a third category of workers that ensures basic protection and benefits, algorithmic transparency, and collective bargaining. These reforms will ensure flexibility and fairness, which will strengthen an inclusive economy in India.

References

1. NITI Aayog, India’s Booming Gig and Platform Economy: Perspectives and Recommendations on the Future of Work (Government of India 2022) 5, https://www.niti.gov.in/sites/default/files/2022-06/India’s_Booming_Gig_and_Platform_Economy_Report.pdf accessed 10 July 2025.
2. NITI Aayog (n 1) 11.
3. NITI Aayog (n 1) 11.
4. NITI Aayog (n 1) 11.
5. Fairwork India, Fairwork India Ratings 2022: Labour Standards in the Platform Economy (2022) 8, https://fair.work/en/fw/publications/fairwork-india-ratings-2022-labour-standards-in-the-platform-economy/ accessed 7 July 2025.
6. Uma Rani, Digital Labour Platforms and New Forms of Flexible Work in Developing Countries (International Labour Organization 2018) 35, https://www.ilo.org/wcmsp5/groups/public/—dgreports/—inst/documents/publication/wcms_645337.pdf accessed 7 July 2025.
7. Anoushka Ghosh, ‘The Precarity of Gig Workers in India’ (2022) 57(12) Economic and Political Weekly 17.
8. Code on Social Security 2020, s 2(35).
9. Code on Social Security 2020, ss 2(61) and 2(62).
10. Code on Social Security 2020, s 109.
11. Code on Social Security 2020, ss 109-114.
12. Delhi Gig Workers Union v Union of India W.P.(C) 7976/2022 (Delhi HC).
13. NITI Aayog, India’s Booming Gig and Platform Economy (Government of India 2022) https://niti.gov.in accessed 7 July 2025.
14. Uber BV v Aslam [2021] UKSC 5.
15. US Department of Labor, Employee or Independent Contractor Classification Under the Fair Labor Standards Act (2023) https://www.dol.gov/agencies/whd/flsa/independent-contractor accessed 9 July 2025.