Legal Status of Gig Workers in India: Labour protections in the platform economy

Abstract

In India, gig workers are individuals who perform short-term or flexible jobs through apps or online platforms. Unlike traditional employment, where workers have one permanent employer, gig workers do not have a fixed employer and work on a task-by-task basis. Gig workers currently exist within a legal grey area—they are classified neither as employees nor as independent contractors and are therefore largely unprotected and devoid of the most basic labor rights. These workers lack access to minimum wage guarantees, social security, job security, or collective bargaining rights.

Gig workers include drivers for ride-hailing services through applications like Uber, Ola, Rapido, and InDrive; food delivery workers for platforms like Zomato and Swiggy; courier delivery workers for services like Borzo, WeFast, and Dunzo; freelancers such as writers, designers, or tech support providers; and individuals doing home-based or part-time work, including handicrafts and tailoring.

This study assesses the effectiveness of existing protections and emphasizes the urgent need for a comprehensive regulatory framework. This framework should strike a balance between providing flexibility for platforms and ensuring security and rights for workers. It advocates for a redefinition of employment relationships in the digital age to establish inclusive and sustainable labor standards in the gig economy.

Introduction

The gig economy has transformed the way work is organized and carried out in India, thanks to digital platforms like Ola, Uber, Swiggy, and Zomato. Gig workers—also known as platform or on-demand workers—typically engage in short-term, flexible jobs that they access through mobile apps or online platforms. While this model has created employment opportunities and made services more convenient for consumers, it has also raised significant questions about the legal status and protections afforded to gig workers under Indian labor law.

A 2017 Ernst and Young study on the “Future of Jobs in India” found that 24% of the world’s gig workers come from India.[1] The gig economy allows people across cities, age groups, and skill levels to work without being tied to a single employer. For those entering the labor force, it is often easier to find gig work than traditional employment, which typically requires prior work experience. The rise of the gig economy has significantly transformed the country’s labor market, though it comes with risks including financial instability and limited labor protections. NITI Aayog estimates that the sector employed 7.7 million workers in 2020, and this number is projected to triple to 23.5 million by 2029-30.[2]

Why Are People Choosing Gig Work?

The reasons people turn to gig work are as diverse as the gigs themselves. For some, it’s a way to earn extra income as a side hustle. For others, it’s a career path built around flexibility and autonomy. Gig work also provides income opportunities for those affected by economic downsizing and layoffs, or for individuals seeking to escape traditional 9-to-5 employment structures.

Post-Pandemic Shifts in Work Culture: While gig work has always been part of the workforce, the pandemic accelerated its growth. As millions of workers transitioned from offices to remote work, many discovered they could earn money—and in some cases, more money—on their own terms.

Increased Accessibility: Digital platforms like Uber, Blinkit, Swiggy Instamart, Zepto, and Zomato make it easier than ever for people to sign up for gig work. Similarly, freelancing platforms like Upwork and Fiverr allow creative professionals to offer services remotely, reaching clients around the world with minimal startup costs.

Side Hustles as the New Norm: Economic uncertainty, layoffs, student debt, and a desire for financial independence have pushed many full-time employees to take on freelance projects or part-time gigs in their spare time. Whether it’s tutoring online, selling handmade goods on Etsy, or managing social media for local businesses, side hustles have become a way to bridge the gap between income and expenses.

Generational Shifts: Millennials and Gen Z tend to value freedom and purpose over traditional work schedules. They’re more likely to seek flexible income streams and pursue passion projects, and the concept of working from anywhere is practically second nature to them. A Pew Research study found that nearly 40% of Gen Z workers engage in gig work.

Technology Enhancement: AI tools like ChatGPT, Canva, Asana, and CoPilot are helping gig workers streamline their work, automate routine tasks, and take on more clients. This technological support has opened up new kinds of freelance roles, from prompt engineering to digital coaching and virtual assistance.[3]

Disadvantages of the Gig Economy

In India, the gig economy has grown rapidly, covering services including food delivery, ride-sharing, and freelance work. However, regulatory protections for gig workers’ rights and safety have not kept pace with this growth. Gig workers face numerous challenges:[4]

1. Income Fluctuation: Most gig workers don’t have steady employment or fixed hours, resulting in highly variable income. This unpredictability often forces them to work excessive hours to earn sufficient income.

2. Unsafe Working Conditions: Strict delivery requirements—such as 10-minute delivery deadlines—push workers to rush, risking their safety. The constant pressure to meet tight deadlines causes stress and burnout, making these jobs both unsafe and difficult to sustain long-term.

3. Social Isolation: Gig workers often experience loneliness because they typically work independently without a regular workplace. Without a team environment, they miss out on professional support and social interaction that benefit both career development and personal well-being.

4. Limited Legal Protections: Most gig workers are classified as independent contractors, meaning they lack protections against unfair treatment, discrimination, or unexpected termination without notice.

5. Work-Life Conflicts: Gig workers tend to work longer or irregular hours to meet income targets, limiting their ability to achieve work-life balance. This can lead to increased stress and burnout.

6. Digital Divide: Not every worker has access to reliable internet, smartphones, or possesses basic digital literacy. These barriers make it difficult for some individuals to participate in or succeed within the gig economy.

7. Gender Inequalities: Female gig workers face additional disadvantages, including limited access to social protection, fewer career advancement opportunities, and lower wages compared to men performing comparable work.

Advantages of Gig Work

1. Flexibility: Gig work offers the freedom to choose when and where to work. This flexibility is ideal for individuals who value work-life balance and need to accommodate personal responsibilities.

2. High Earnings Potential: Certain gig positions, especially those requiring specialized skills, can offer substantial earning potential.

3. Diverse Work Opportunities: Gig workers have the opportunity to explore freelance work across a wide range of projects, industries, and clients. This variety can be professionally fulfilling and allows individuals to develop new skills while building a diverse portfolio of work.[5]

Legal Perspective: India’s Labor Code Reforms

Four labor codes were introduced to benefit workers in the unorganized sector, including gig workers. One of these codes, the Code on Social Security, 2020, was established based on recommendations from the Second National Labor Commission. This Code consolidates nine existing laws into a single comprehensive framework. The four codes are:[6]

1. Code on Wages
2. Industrial Relations Code
3. Social Security Code
4. Occupational Safety, Health and Working Conditions Code

Code on Wages, 2019: The Code on Wages, 2019, amalgamated four previous laws concerning wages and bonuses for all workers. The Central Government serves as the wage authority for sectors such as railways and mining, while state governments are responsible for other sectors. The Code establishes a minimum wage that must be reviewed every five years and includes guidelines for working hours and overtime, allowing for up to a 50% deduction of wages. The Code prohibits wage discrimination based on gender, with violations potentially resulting in imprisonment of up to three months and fines of up to Rs. 1 lakh.

Industrial Relations Code, 2020: The Industrial Relations Code changed the threshold for compulsory regulations from 100 to 300 workers, reducing restrictions on hiring and firing for businesses below this threshold. For establishments employing more than 300 workers, restrictions remain on business closures, layoffs, and terminations—such employers must obtain government permission before laying off or firing workers. The Code requires a 60-day notice before strikes can take place and prohibits strikes during legal proceedings and for 60 days thereafter. It also established a retraining fund for laid-off workers, requiring employers to contribute an amount equivalent to 15 days of the worker’s last drawn salary.

Code on Social Security, 2020: This Code raised the threshold for compulsory standing orders from 100 to 300 workers, making it easier for smaller businesses to hire and fire. Companies with more than 300 workers require government approval to close their business or lay off workers, though this requirement does not apply if the closure is due to insolvency. The Code mandates 60 days’ notice before strikes and prohibits strikes while legal proceedings about union recognition are pending and for 60 days after such proceedings conclude. The Code creates a fund for retraining laid-off workers, with employers required to contribute an amount equivalent to 15 days’ wages.

Code on Occupational Safety, Health and Working Conditions, 2020: This Code revised the definition of a factory to include workplaces where 20 workers use power, or 40 workers operate without power. For dangerous work, no worker threshold applies. The rules apply to contractors with 50 or more workers and establish a maximum workday of eight hours. The Code permits women to work in all jobs, including night shifts, provided they consent and appropriate safety measures are in place. Employers must provide appointment letters to workers. Migrant workers earning up to Rs. 18,000 can transfer their ration benefits when they migrate, though temporary housing is not mandated. The Code also requires employers to pay return travel expenses for workers who migrate from their home states for work.

Conclusion

The gig economy in India is experiencing rapid growth, expanding beyond its origins in ride-sharing and food delivery to include sectors such as technology, healthcare, education, and creative services. Indian gig workers have become a driving force in the labor market, providing businesses with greater flexibility and access to specialized skills while offering workers opportunities to pursue diverse career paths. With advancing technology and evolving work preferences, the gig workforce is projected to grow from approximately 7.7 million in 2020-21 to nearly 62 million by 2047, potentially comprising approximately 15% of the non-agricultural workforce. This growth is being propelled by digital platforms, demographic shifts, and increasing demand for flexible, project-based employment opportunities.

Recent policy developments have recognized the significance of gig workers. Proposed reforms include formal identity cards, e-Shram registration, and access to social security and healthcare schemes, such as extended Ayushman Bharat coverage. These measures are designed to address long-standing gaps in recognition, financial security, and social protection for gig workers.

However, despite these positive developments, significant challenges persist. Effective implementation of social security policies, regulatory clarity, and equitable employment standards remain elusive. The legal status of gig workers continues to exist in a grey area, leaving millions without adequate protection. A comprehensive regulatory framework is urgently needed—one that balances platform flexibility with worker security and rights, thereby redefining employment relationships for the digital age and establishing truly inclusive and sustainable labor standards in India’s gig economy.

References

[1] The Nyaaya Guest Blog, citing Ernst & Young, Future of Jobs in India (2017).
[2] International Labour Organization; NITI Aayog estimates.
[3] Western Governors University (wgu.edu), analysis of gig economy trends.
[4] Lawbhoomi.com, disadvantages of gig economy in India.
[5] TalentHR.io, advantages of gig work.
[6] Articles.manupatra.com; Code on Wages, 2019; Industrial Relations Code, 2020; Code on Social Security, 2020; Code on Occupational Safety, Health and Working Conditions, 2020.