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App-based gig workers seek clarity on how social security schemes will be funded

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The draft rules on how gig workers and platform workers will be given benefits under the Code on Social Security, 2020 need to clarify how welfare schemes prescribed in the Code will be funded, the Indian Federation of App Based Transport Workers recommended in a press note. The organisation, which represents over 35,000 workers, also said that the government needs to clearly define the conditions and criteria before exempting an aggregator or a class of aggregators from contributing funds to social security.

The draft social security rules offer little clarity about the collection of contribution for the Social Security Fund. While the draft rules say that “the Central Government shall identify the source(s) for initial funding/ replenishing the Social Security Fund from time to time,” the process or criteria for this have not been detailed, the organisation noted. It recommended that a fixed timeline be provided about when the government will set up the National Social Security Board for gig and platform workers.

The government in November had invited comments for draft rules for social security benefits for gig, platform workers, under the Code on Social Security, 2020 which was passed in September. The draft rules lay out the formation of a National Social Security Board for Gig Workers and Platform Workers and solidifies the mandatory registration with Aadhaar which it has briefly indicated in the law.

The Code on Social Security for the first time recognised the gig economy — gig workers, platform workers, and aggregators — and made space for their benefits around life and disability cover, accident insurance, health and maternity benefits, etc. Aggregators such as Zomato, Uber, and Ola, will have to contribute between 1–2% of their annual turnover to such social security funds for workers, this amount will be capped at 5% of the total amount payable to gig workers and platform workers.

Other recommendations made by IFAT

The organisation recommended that the government specify the various social security benefits it may roll out, and clarify the jurisdiction of various Ministries on different types of aggregators, among other things. Its recommendations:

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  • Government should clarify its welfare schemes: There needs to be clarity on “any other benefit as may be determined by the Central Government”, IFAT said. As per the Code, the government is supposed to launch various welfare schemes for gig workers and platform workers including life and disability cover, maternity benefits, and “any other benefit as may be determined” by the government, among other things. “Does it include EPF [Employees’ Provident Fund], ESIC [Employees State Insurance Corporation], Gratuity, Pension Scheme etc.” IFAT asked.
    • There also need to be clear provisions in the rules detailing which schemes will be applicable and when and how can the workers access them, IFAT added.
    • Any welfare scheme formulated by the central government could also be partly funded by a “ride cess” collected from customers or users of platform services, IFAT recommended.
  • Which Ministry will be responsible for which aggregator? The Code should also offer clarity on the jurisdiction, including under which Ministry and legislative act different aggregators will function and operate, IFAT said. It should also clarify whether a particular aggregator functions as a digital intermediary, marketplace, or a service provider. In the current version of the Code, an “aggregator” means a “digital intermediary or a marketplace for a buyer or user of a service to connect with the seller or the service provider”.
  • What are the conditions for member nomination to the Social Security Board? Members nominated to the National Social Security Board by the central government should include representatives of unions of gig works and platform workers. The draft rules say that the central government will have to nominate five members to the Board. Besides, the draft rules should also clarify the nomination process to the Board.
  • Define platform workers better: While the Code identifies an “agent”, a “contractor”, and a “platform worker” separately, IFAT noted that the definitions of these people is separate and unique, whereas both agents and contractors should be exclusively defined as a “platform worker”. If “agent” or “contractor” is being used to refer to a person performing platform work in any legal document or contract, as per the code that person should be exclusively defined as a “platform worker”.

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