The Indian labour law landscape underwent a historic structural transformation with the official enforcement of the four Labour Codes. Crucially, the Code on Social Security, 2020, was brought into legal force effective November 21, 2025. Subsequently, the Ministry of Labour and Employment notified the final subordinate legislation—the Social Security (Central) Rules, 2026—on May 8 and 9, 2026, completely operationalizing the statutory framework.

For the first time in Indian legislative history, the Social Security Code, 2020 extends the protective umbrella of social security beyond the traditional employer-employee master-servant relationship, formally recognizing and granting statutory rights to India’s rapidly expanding gig and platform workers (projected by NITI Aayog to reach 23.5 million by 2030).

This publication provides a comprehensive doctrinal and compliance analysis of the Social Security Code, 2020, and the finalized 2026 Rules, delineating the specific legal rights of gig workers and the corresponding statutory liabilities imposed upon digital aggregators.

Statutory Definitions And Scope (Section 2)

To eliminate jurisdictional ambiguity, the Social Security Code 2020 precisely distinguishes the new categories of workers:

• Gig Worker [Section 2(35)]: Defined as a person who performs work or participates in a work arrangement and earns from such activities outside of a traditional employer-employee relationship.
• Platform Worker [Section 2(61)]: A sub-category of gig workers who use an online algorithmic matching platform to provide specific services or solve specific problems (e.g., ride-hailing drivers, food delivery partners).
• Aggregator [Section 2(2)]: A digital intermediary or marketplace for a buyer or user of a service to connect with the seller or service provider (platform worker). The Seventh Schedule of the Code explicitly lists aggregator categories, including ride-sharing services, food and grocery delivery, logistics, and e-commerce platforms.

The post India’s Gig Economy Workers Under Social Security Code 2020: Legal Rights, Implementation And 2026 Rules Update appeared first on Bhatt & Joshi Associates.

The digital revolution has fundamentally transformed India’s employment landscape, creating a vast ecosystem of gig and platform workers who power the country’s urban economy. From delivering hot meals to your doorstep to providing ride-hailing services, these workers form the backbone of India’s modern service sector. Yet until recently, millions of these workers operated in a legal vacuum, devoid of the social security protections that traditional employees take for granted. The implementation of the Code on Social Security, 2020 in November 2025 marks a watershed moment in Indian labour law, formally recognizing gig and platform workers for the first time at the national level. [1]. This recognition comes after years of sustained advocacy by worker unions and follows pioneering state-level legislation that demonstrated the urgent need for legal protections in this rapidly expanding sector.

The Gig Economy in India: Scale and Significance

India’s gig economy has witnessed exponential growth over the past decade, transforming from a nascent concept into a critical component of the nation’s economic infrastructure. According to estimates from NITI Aayog, the sector employed approximately 7.7 million workers in 2020, a figure projected to surge to 23.4 million by 2029-2030 [2]. This remarkable expansion reflects not only technological advancement but also the harsh reality of limited formal employment opportunities for India’s youth. The platforms facilitating this economy, including Uber, Ola, Swiggy, Zomato, Urban Company, and numerous others, have created a new category of work that exists in the grey zone between traditional employment and independent contracting. These workers typically lack steady wages, paid overtime, healthcare benefits, or any form of job security, despite performing essential services that keep India’s cities functioning.

Legislative Framework: The Code on Social Security, 2020

The cornerstone of social security protection for gig and platform workers in India is the Code on Social Security, 2020, which Parliament passed on September 23, 2020 [3]. This legislation represents one of four labour codes designed to consolidate and modernize India’s complex web of labour laws, amalgamating nine previous enactments into a single framework. The Code came into force on November 21, 2025, finally bringing legal recognition to the millions of workers in the gig economy. The Code explicitly 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 relationships. Similarly, it defines “platform work” as work arrangements outside conventional employment where organizations or individuals use online platforms to access services in exchange for payment. Most significantly, the Code defines “aggregator” as a digital intermediary connecting buyers and sellers, explicitly bringing platform companies under regulatory oversight.

The legislative framework mandates several critical protections. Aggregators must contribute between one and two percent of their annual turnover, capped at five percent of the amount payable to gig and platform workers, into a dedicated social security fund [4]. This fund, administered by the Central and State Governments, aims to finance various welfare schemes including life insurance, disability insurance, health benefits, maternity benefits, and old-age protection. The Code establishes a National Social Security Board responsible for recommending schemes for different categories of workers and monitoring their implementation. State governments must similarly constitute State Unorganised Workers’ Boards to oversee welfare programs at the regional level. Each worker receives an Aadhaar-linked Universal Account Number, ensuring portability of benefits when moving across states or between platforms.

Key Provisions and Benefits Under the Code on Social Security, 2020

The social security provisions extend across multiple dimensions of worker welfare. The Code provides for health insurance coverage, ensuring that gig workers can access medical care without facing financial catastrophe. Maternity benefits protect women workers during pregnancy and childbirth, addressing a critical gap in protection for female gig workers. Disability and accident insurance offers a safety net when workers face occupational injuries, while life insurance provides support for workers’ families. Perhaps most importantly, old-age pension schemes recognize that gig workers, like traditional employees, need income security in their later years. The Code also introduces novel protections, such as deeming accidents occurring while commuting between residence and workplace as arising in the course of employment, a provision that acknowledges the realities of gig work where the boundaries between work and personal time often blur [5].

State-Level Pioneering: The Rajasthan Model

Even before the central legislation took effect, several states took proactive steps to protect gig workers within their jurisdictions. Rajasthan led this movement by passing the Rajasthan Platform-Based Gig Workers (Registration and Welfare) Act, 2023 on July 24, 2023, becoming the first state to specifically legislate for platform-based gig workers [6]. This groundbreaking legislation established the Rajasthan Platform-Based Gig Workers Welfare Board, mandated registration of all gig workers and aggregators, and created a dedicated welfare fund financed through a welfare cess ranging from one to two percent of each transaction value. The Act requires aggregators to deposit this cess by the fifth day of each month and introduced a Central Transaction Information and Management System to monitor all platform payments transparently. Registered workers receive unique identification numbers valid across all platforms, enabling comprehensive tracking of their employment history and entitlements. The legislation also established a grievance redressal mechanism, allowing workers to petition designated authorities regarding violations of their rights. Non-compliant aggregators face substantial penalties, including fines up to five lakh rupees for first contraventions and fifty lakh rupees for subsequent violations.

Evolution and Expansion: Karnataka, Bihar, and Jharkhand

Following Rajasthan’s example, Karnataka enacted the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Act, 2025 in August 2025, incorporating all provisions of the Rajasthan law while introducing several improvements [7]. Karnataka’s legislation increased the welfare fee range to between one and five percent based on aggregator categories and expanded social security benefits beyond insurance to include health coverage, accident protection, and financial assistance. The Act established a two-tiered grievance procedure, requiring aggregators to maintain Internal Dispute Resolution Committees while allowing escalation to the Welfare Board if issues remain unresolved within fourteen days. Karnataka also mandated that aggregators provide workers with a human point of contact for queries, addressing the frustration many gig workers experience when dealing with algorithm-driven management systems. Bihar and Jharkhand followed suit in August 2025, bringing the total number of states with dedicated gig worker legislation to four. These state laws have created parallel frameworks that, while aligned with central legislation, provide more detailed implementation mechanisms and stricter enforcement provisions.

Judicial Interpretation and Worker Classification

Indian courts have played a crucial role in shaping the legal status of gig workers, often stepping in where legislation lagged. The landmark case of Indian Federation of App-Based Transport Workers v. Union of India, filed before the Supreme Court in September 2021, directly challenges the classification of gig workers as independent contractors rather than employees [8]. The petitioners, representing thousands of Uber, Ola, Swiggy, and Zomato workers, argue that their exclusion from traditional labour protections violates Articles 14, 21, and 23 of the Constitution, which guarantee equality, right to life, and protection from forced labour. The case remains pending, but its significance cannot be overstated. If the Court rules that gig workers qualify as employees, it would fundamentally reshape the legal landscape, potentially extending minimum wage protections, the right to unionize, and comprehensive labour law coverage to millions of workers.

Another significant case, X v. Internal Complaints Committee, ANI Technologies Pvt. Ltd., decided by the Karnataka High Court in 2019, demonstrated how courts can expand worker protections even within existing legal frameworks [9]. When a female passenger experienced sexual harassment by an Ola driver, the court had to determine whether the driver qualified as an “employee” under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The court conducted a detailed analysis of the control Ola exercised over its drivers, examining how the platform determined rates, charges, service standards, vehicle maintenance requirements, booking acceptance policies, and payment methods. Finding that this level of control went far beyond that of a mere technological intermediary, the court ruled that Ola drivers do qualify as employees for purposes of the POSH Act. While this decision does not automatically extend employment status across all labour laws, it established an important precedent that courts will examine the substance of the relationship rather than accepting platform companies’ self-characterization as mere intermediaries.

Challenges in Implementation

Despite these legislative and judicial advances, significant implementation challenges persist. The division of labour policy between the central and state governments creates potential for uneven access to protections. State governments bear responsibility for designing, notifying, and administering many schemes needed to make the Code operational, raising the possibility that workers in some states will enjoy robust protections while those in other states face delays or inadequate support. The experience of Rajasthan illustrates this challenge. Although the state passed its gig worker legislation in July 2023, the change in government following the December 2023 elections has stalled implementation, with the new administration yet to notify the rules necessary to operationalize the Act [2]. This demonstrates how political will and administrative capacity critically influence whether legal protections translate into real-world benefits.

The actual benefits available to workers remain unclear. While the Code creates the framework for social security schemes, neither the central legislation nor most state laws specify the exact nature, quantum, or eligibility criteria for benefits. Workers registering on the government’s E-Shram portal often find little incentive to do so, as the system does not address their immediate concerns regarding fluctuating earnings, arbitrary account suspensions, or sudden terminations. Trade unions have criticized this gap, noting that without addressing fundamental issues like minimum wages and employment security, social security benefits alone cannot substantially improve workers’ lives. The requirement that aggregators contribute based on turnover or transaction values also raises questions about how contributions will be tracked across multiple platforms and how the system will prevent companies from underreporting to minimize their obligations.

Constitutional and Rights-Based Perspectives

Beyond statutory provisions, gig workers’ claims to social security rest on constitutional foundations. Article 21 of the Indian Constitution, which guarantees the right to life, has been interpreted expansively to include the right to livelihood and dignified working conditions. Workers’ advocates argue that the denial of social security to gig workers violates this fundamental right, as it leaves them vulnerable to poverty, ill-health, and destitution despite their labour contributing significantly to the economy. Article 23, which prohibits forced labour, provides another constitutional basis for worker protections. When platform companies exercise extensive control over workers’ activities, compensation, and working conditions while denying them the benefits associated with employment, some commentators argue this creates a form of exploitative labour that Article 23 was designed to prevent. Article 14’s guarantee of equality before the law supports the argument that gig workers should not receive inferior protections compared to traditional employees performing similar work under similar conditions of subordination and economic dependence.

Comparative Analysis: International Approaches

India’s approach to gig worker regulation sits within a broader global conversation about how to balance the flexibility that platforms and workers value against the need for adequate protections. The United Kingdom’s Supreme Court decision in Uber BV v. Aslam established that Uber drivers qualify as “workers” entitled to minimum wage and paid leave, rejecting the company’s argument that drivers operated as independent contractors. The court examined the degree of control Uber exercised and concluded that this control, combined with drivers’ economic dependence on the platform, made them workers in substance if not in form. California’s Assembly Bill 5, which reclassified many gig workers as employees using an “ABC test,” represented an even more aggressive approach, though it faced significant pushback and subsequent modifications. These international precedents demonstrate different strategies for addressing the gig worker challenge, each with distinct implications for platform business models, worker welfare, and market flexibility.

The Path Forward: Gaps and Recommendations

While India’s new labour codes represent significant progress, substantial work remains to ensure gig workers receive meaningful protection. First and most urgently, both central and state governments must finalize and notify the rules necessary to operationalize the Code’s provisions. Without these implementing regulations, the statutory framework remains largely aspirational. Second, the definition of benefits must be clarified and standardized across jurisdictions to prevent a patchwork system where workers’ protections depend on their geographic location or the specific platform they work for. Third, the legislation must address income security more directly. Current provisions focus on insurance and pension schemes, but they do not establish minimum wages, maximum working hours, or protections against arbitrary deactivation or unfair termination. Trade unions have consistently emphasized that social security, while important, cannot substitute for fair compensation and job security.

Fourth, the grievance redressal mechanisms need strengthening. Many gig workers report that algorithmic management systems make it difficult or impossible to appeal decisions or resolve disputes, as they have no human contact point within the platform companies. State legislation like Karnataka’s requirement for human points of contact represents progress, but this must be implemented uniformly and backed by strict enforcement. Fifth, workers must have genuine opportunities to participate in collective bargaining and union activity. The Code and state laws establish boards with worker representation, but the selection of these representatives must be democratic and transparent rather than being controlled by governments or platforms. Finally, penalties for non-compliance must be enforced consistently. Legislation that imposes substantial fines for violations means little if regulatory agencies lack the resources or political support to conduct inspections and pursue enforcement actions against powerful platform companies.

Conclusion

The recognition of gig and platform workers under India’s Code on Social Security, 2020 marks a critical turning point in the evolution of labour law. After years of operating in legal limbo, millions of workers now have formal status and, at least in principle, access to social security protections. The pioneering efforts of states like Rajasthan, Karnataka, Bihar, and Jharkhand demonstrate that subnational governments can drive innovation in worker protection even when central action lags. Judicial interventions, particularly in cases examining the nature of platform control over workers, continue to refine our understanding of employment relationships in the digital age. Yet recognition alone does not ensure protection. The gap between legislative frameworks and lived reality remains substantial. Many workers report that the new codes have not yet improved their daily working conditions, earnings, or security. Implementation challenges, including the need for detailed implementing rules, adequate funding for social security schemes, effective grievance mechanisms, and robust enforcement, must be addressed if the promise of these reforms is to be realized. The coming years will determine whether India’s legal framework for gig workers represents a genuine transformation in labour relations or merely a symbolic gesture that fails to translate into meaningful change in workers’ lives. The answer will depend on political will, administrative capacity, judicial interpretation, and the continued mobilization of workers themselves demanding that the laws on paper become reality on the ground.

References

[1] Ministry of Labour and Employment. (2025). S.O. 5319(E) – Code on Social Security, 2020 Notification. Government of India. Retrieved from https://labour.gov.in/sites/default/files/ss_code_gazette.pdf 

[2] Labour Review. (2025). Beyond Welfare in India’s Gig Sector. Retrieved from https://labourreview.org/beyond-welfare/ 

[3] Parliament of India. (2020). The Code on Social Security Act, 2020 (Act No. 36 of 2020). India Code. Retrieved from https://www.indiacode.nic.in/handle/123456789/16823 

[4] Business Standard. (2025). From gig workers to factories: What India’s new labour codes really mean. Retrieved from https://www.business-standard.com/economy/news/labour-codes-india-worker-rights-gig-workers-wages-social-security-125112400388_1.html 

[5] The Week. (2025). No more job safety anxiety: How India’s new social security law reforms help gig workers, contract employees. Retrieved from https://www.theweek.in/news/biz-tech/2025/11/22/no-more-job-safety-anxiety-how-india-s-new-social-security-law-reforms-help-gig-workers-contract-employees.html 

[6] Government of Rajasthan. (2023). The Rajasthan Platform Based Gig Workers (Registration and Welfare) Act, 2023. PRS Legislative Research. Retrieved from https://prsindia.org/files/bills_acts/acts_states/rajasthan/2023/Act29of2023Rajasthan.pdf 

[7] PRS Legislative Research. (2025). The Karnataka Platform Based Gig Workers (Social Security and Welfare) Bill, 2025. Retrieved from https://prsindia.org/bills/states/the-karnataka-platform-based-gig-workers-social-security-and-welfare-bill-2025 

[8] Supreme Court Observer. (2022). Gig Workers’ Access to Social Security – The Indian Federation of App Based Transport Workers v. Union of India. Retrieved from https://www.scobserver.in/cases/gig-workers-access-to-social-security-the-indian-federation-of-app-based-transport-workers-ifat-v-union-of-india/ 

[9] Economic and Political Weekly. (2024). Gig Workers under the POSH Act. Retrieved from https://www.epw.in/journal/2024/42/law-and-society/gig-workers-under-posh-act.html 

The post Gig and Platform Workers: Social Security Coverage for the New-Age Workforce appeared first on Bhatt & Joshi Associates.

Introduction

India’s employment landscape has undergone remarkable transformation over the past decade, particularly with the explosive growth of the gig economy. The rise of digital platforms connecting service providers with consumers has created millions of work opportunities, yet simultaneously exposed significant vulnerabilities in worker protection mechanisms. As of recent estimates, the gig workforce in India comprises approximately 7.7 million workers, with projections indicating this number could surge to 23.5 million by 2029-30.[1] These workers, employed by platforms such as Uber, Ola, Swiggy, and Zomato, operate outside traditional employment relationships, often lacking access to fundamental social security benefits that regular employees enjoy. This structural gap has prompted the Indian government to mandate aggregator contributions for gig workers’ welfare, though the implementation remains fraught with ambiguity and challenges.

Understanding the Gig Economy Framework

The gig economy represents a fundamental departure from conventional employment models. Workers in this sector engage in temporary, flexible work arrangements facilitated through digital platforms, earning income based on completed tasks rather than fixed salaries. Unlike traditional employees who benefit from provident funds, health insurance, paid leave, and job security, gig workers function as independent contractors, bearing the full burden of their operational costs and risks. The platforms themselves have consistently maintained that they merely provide technological infrastructure connecting supply with demand, explicitly disclaiming any employer-employee relationship with the workers who deliver services through their applications.

This classification has significant legal and financial implications. By categorizing workers as independent contractors rather than employees, platforms have historically avoided obligations under various labour statutes, including the Employees’ Provident Fund Act, the Employee State Insurance Act, and the Minimum Wages Act. The absence of regulatory oversight has enabled platforms to exercise substantial control over workers through algorithmic management systems that determine work allocation, pricing, and performance ratings, while simultaneously denying them the protections afforded to formal sector employees. This paradox, where platforms exert employer-like control without corresponding responsibilities, has become the central point of contention in India’s evolving labour jurisprudence.

The Code on Social Security, 2020: A Legislative Breakthrough

The enactment of the Code on Social Security, 2020 marked a watershed moment in Indian labour law, representing the first central legislation to formally recognize gig workers and platform workers as distinct categories deserving social protection. This Code consolidates nine previously existing social security enactments into a unified framework, extending coverage to workers who had hitherto remained outside the formal labour protection system.[2] The legislation defines a gig worker as a person who performs work or participates in work arrangements and earns from such activities outside of traditional employer-employee relationships, while a platform worker is specifically defined as someone engaged in or undertaking platform work through digital intermediaries.

Aggregator Contributions: Mandatory Obligations for Gig Workers

The Code introduces the concept of aggregators as digital intermediaries or marketplaces that connect buyers or service users with sellers or service providers. Section 114 of the Code empowers the Central Government to formulate and notify social security schemes for gig and platform workers, covering life and disability insurance, accident coverage, health and maternity benefits, old age protection, creche facilities, and other welfare measures as determined appropriate. Significantly, the Code mandates financial contributions from aggregators to support these schemes, establishing a funding mechanism that distributes responsibility among multiple stakeholders.

Aggregator contributions are a critical component of how gig workers access welfare benefits. The contribution structure prescribed under the Code ranges from one to two percent of the aggregator’s annual turnover, with an important caveat that such contributions cannot exceed five percent of the total amounts paid or payable to gig and platform workers in any financial year.[3] This dual limitation ensures that aggregator contributions support gig workers meaningfully while preventing disproportionate financial burdens that could threaten business viability. The contributions flow into a Social Security Fund, which serves as the financial reservoir for implementing various welfare schemes designed specifically for unorganized, gig, and platform workers.

Registration and Implementation Mechanisms

The Code mandates compulsory registration of all gig and platform workers on a government-specified online portal, with eligibility restricted to individuals between sixteen and sixty years of age. Registered workers receive a unique identification number linked to their Aadhaar, creating a unified database that facilitates benefit portability across platforms and states. This registration system aims to address one of the fundamental challenges facing gig workers, namely the inability to accumulate continuous social security benefits when switching between different platforms or geographic locations. The Code also establishes a National Social Security Board, which includes representation from aggregators, workers, government ministries, and civil society organizations, tasked with advising on scheme formulation and monitoring implementation effectiveness.

State-Level Legislative Initiatives

The Rajasthan Precedent

Even before the central labour codes became operational, several states recognized the urgent need for gig worker protection and initiated their own legislative frameworks. Rajasthan became the trailblazer in 2023 with the enactment of the Rajasthan Platform Based Gig Workers (Registration and Welfare) Act, 2023, establishing a comprehensive regulatory structure for platform-based work within the state.[4] This legislation mandates the registration of aggregators, primary employers, and gig workers with the Rajasthan Platform Based Gig Workers Welfare Board, which functions as the primary administrative body overseeing worker welfare in the state.

The Rajasthan Act requires aggregators and employers to deposit a monthly welfare cess designated as the Platform Based Gig Workers Welfare Cess, which flows into the Rajasthan Platform Based Gig Workers Social Security and Welfare Fund. All transactions involving gig workers are tracked through a Central Transaction Information and Management System, creating transparency in payment flows and ensuring contribution compliance. The Act represents a significant departure from the purely voluntary welfare approaches that had previously characterized the gig economy, imposing mandatory obligations on platforms to contribute toward worker protection regardless of their claimed relationship with service providers.

Karnataka’s Regulatory Framework

Following Rajasthan’s example, Karnataka promulgated the Karnataka Platform Based Gig Workers (Social Security and Welfare) Ordinance, 2025, later replaced by the Karnataka Platform Based Gig Workers (Social Security and Welfare) Bill, 2025. This legislation establishes the Karnataka Platform Based Gig Workers Welfare Board and creates the Karnataka Gig Workers’ Social Security and Welfare Fund, financed through welfare fees collected from aggregators, contributions from gig workers themselves, and grants from central and state governments.[5] The Karnataka framework is particularly notable for its emphasis on algorithmic transparency, requiring aggregators to provide information about automated monitoring and decision-making systems that affect work allocation, earnings determination, and performance evaluation.

The Karnataka legislation mandates that aggregators execute fair contracts with gig workers, written in languages comprehensible to the workers, with fourteen days’ advance notice required for any contract modifications. Arbitrary termination is prohibited, with platforms required to specify predetermined grounds for contract termination and provide adequate notice periods. For aggregators engaging more than fifty gig workers, the law requires establishment of Internal Dispute Resolution Committees, providing workers with accessible grievance redressal mechanisms without necessitating recourse to expensive and time-consuming court proceedings.

Telangana’s Proposed Framework

The Draft Telangana Gig and Platform Workers (Registration, Social Security, and Welfare) Bill, 2025 proposes a similar regulatory architecture, establishing a welfare board, mandating worker registration with unique identifiers, and requiring aggregators to pay welfare fund fees ranging from one to two percent of relevant metrics.[6] Notably, the Telangana draft characterizes failure to pay the welfare fund fee as a criminal offense, potentially punishable with imprisonment up to one year, a fine of up to two lakh rupees, or both. This criminalization represents a significantly more stringent enforcement approach compared to other state frameworks, signaling serious governmental intent to ensure compliance with contribution obligations.

Judicial Interpretation and Case Law Development

The Indian Federation of App-Based Transport Workers Case

The most significant ongoing judicial consideration of gig worker rights is the public interest litigation filed by the Indian Federation of App-Based Transport Workers (IFAT) before the Supreme Court of India. In this case, IFAT, representing approximately 35,000 drivers and delivery workers associated with platforms including Uber, Ola, Zomato, and Swiggy, has challenged the classification of gig workers as independent contractors, arguing that this designation violates fundamental constitutional rights guaranteed under Articles 14, 21, and 23 of the Constitution.[7] The petitioners contend that the refusal to recognize gig workers as employees or unorganized workers under existing social security legislation denies them equal protection under law, violates their right to life and dignity, and effectively subjects them to exploitative working conditions amounting to forced labour.

The petition specifically seeks recognition of gig workers as unorganized workers under the Unorganised Workers’ Social Security Act, 2008, and other applicable social security legislation, which would automatically entitle them to various welfare benefits. IFAT argues that platforms exercise comprehensive control over all aspects of service delivery, including pricing, route determination, customer allocation, performance monitoring, and disciplinary action, thereby establishing a de facto employer-employee relationship regardless of contractual labeling. The Supreme Court issued notice to the Central Government and concerned platforms in December 2021, and the matter remains pending adjudication, with its eventual resolution likely to have far-reaching implications for the entire gig economy sector.

The Kavita Sharma Consumer Forum Decision

In a separate but related development, the Thane District Consumer Forum delivered a significant ruling in Kavita S. Sharma v. Uber India in October 2022, holding Uber liable for actions of its drivers despite the absence of a formal employment relationship. This decision, arising from a consumer complaint rather than a labour dispute, established that platforms cannot disclaim responsibility for service quality and safety merely by characterizing workers as independent partners. While this judgment did not directly address social security obligations or aggregator contributions, it represents judicial recognition that contractual labels cannot override substantive control relationships, potentially opening pathways for similar reasoning in employment law contexts.

Pending Questions and Judicial Precedents

Indian courts have historically applied multifactor tests to determine employment relationships, considering elements such as control exercised by the employer, supervision of work, conditions of employment determination, disciplinary authority, provision of tools and materials, insurance contribution deductions, and mutual obligations between parties. The landmark Supreme Court judgment in Hussainbhai v. Alath Factory established that where workers labour to produce goods or services for another’s business, an employment relationship may exist regardless of formal contractual arrangements. Whether courts will extend this reasoning to platform-based work remains uncertain, particularly given the novel characteristics of algorithmic management and the absence of traditional workplace structures in the gig economy.

Implementation Challenges and Practical Concerns

Definitional Ambiguities

Despite the progressive intent underlying recent legislation, significant ambiguities plague the implementation of aggregator contribution schemes for Gig and platform workers. The definition of gig workers remains sufficiently broad to potentially encompass various forms of contractual employment that were not intended to fall within the regulatory framework. Similarly, the calculation methodology for aggregator contributions contains inconsistencies across different legislative texts, with some provisions referencing gross turnover while others refer to gross revenue, creating interpretational challenges that may lead to litigation and compliance difficulties.

Interstate Coordination Challenges

The proliferation of state-level legislation, while demonstrating governmental responsiveness to worker needs, creates potential coordination problems and compliance burdens for platforms operating across multiple states. Different contribution rates, registration requirements, reporting obligations, and enforcement mechanisms across states could significantly complicate operational compliance, particularly for smaller platforms lacking extensive legal and administrative resources. The inconsistency in aggregator contributions across states creates confusion for gig workers, as the absence of harmonized national standards may inadvertently disadvantage certain categories of workers or create forum-shopping opportunities where platforms structure operations to minimize contribution obligations.

Awareness and Accessibility Gaps

Even well-designed legislative frameworks remain ineffective if intended beneficiaries lack awareness of their entitlements or face barriers accessing benefits. Many gig workers, particularly those operating in smaller cities and rural areas, remain unaware of registration requirements, available schemes, and grievance redressal mechanisms. Despite mandated aggregator contributions for gig workers, language barriers, digital literacy challenges, and the absence of worker organizations capable of facilitating registration and benefit claims further compound accessibility problems. The gap between legislative promise and ground-level implementation remains substantial, requiring sustained governmental efforts in awareness generation, capacity building, and simplified administrative procedures.

International Comparative Perspectives

India’s approach to gig worker protection through aggregator contributions can be usefully contextualized through comparison with international regulatory models. The United Kingdom Supreme Court’s landmark ruling in Uber BV v. Aslam established that Uber drivers qualify as workers entitled to minimum wage, paid leave, and other employment benefits from the moment they log onto the application and remain available for work. This decision fundamentally rejected Uber’s characterization of drivers as independent contractors, recognizing the reality of platform control over working conditions. Similarly, California’s Assembly Bill 5 initially reclassified many gig workers as employees, though subsequent developments including Proposition 22 have created a hybrid model with limited benefits but continued independent contractor status.

The European Union has proposed the Platform Work Directive, which would establish a rebuttable presumption of employment relationship when platforms exercise control over working conditions, with member states required to ensure appropriate social protection for platform workers. These international developments demonstrate a global trend toward enhanced worker protection in the gig economy, with various jurisdictions experimenting with different regulatory approaches ranging from employee reclassification to intermediate worker categories to mandatory benefit schemes funded through platform contributions. India’s model, emphasizing contribution-based welfare schemes without full employment reclassification, represents a middle path attempting to balance worker protection with platform business model flexibility.

Future Outlook and Policy Recommendations

The implementation of the four labour codes, including the Code on Social Security, 2020, which became effective from November 2025, represents a transformative moment for India’s labour regulatory framework.[8] The success of this transformation hinges on several critical factors. First, the Central Government must expeditiously notify specific welfare schemes under Section 114 of the Code, detailing benefit structures, eligibility criteria, contribution collection mechanisms, and disbursement procedures. Without these operational details, the legislative framework remains merely aspirational rather than practically enforceable.

Second, effective enforcement mechanisms must be established, including adequate inspection capacity, penalty structures that deter non-compliance, and streamlined grievance redressal systems that enable workers to vindicate their rights without prohibitive costs or delays. Third, coordination between central and state governments must be strengthened to harmonize differing legislative approaches, prevent regulatory arbitrage, and ensure portability of benefits for workers moving across state boundaries. Fourth, technological infrastructure supporting registration, contribution tracking, and benefit disbursement must be robust, user-friendly, and accessible to workers with varying levels of digital literacy.

Looking ahead, policymakers may need to consider whether the current contribution-based welfare model adequately addresses the structural vulnerabilities facing gig workers or whether more fundamental reforms, such as the creation of an intermediate worker category with enhanced protections falling short of full employment status, might better serve worker interests while preserving platform business model viability. The pending Supreme Court decision in the IFAT case will likely provide crucial guidance on constitutional requirements for gig worker protection, potentially necessitating legislative amendments to ensure compliance with fundamental rights guarantees.

Conclusion

The aggregator contribution framework for gig and platform workers in India represents a significant but incomplete step toward addressing the social security deficit that has characterized the informal economy for decades. The Code on Social Security, 2020, along with pioneering state-level legislation in Rajasthan, Karnataka, and Telangana, establishes mandatory financial obligations on platforms to support worker welfare, breaking from the purely voluntary corporate social responsibility approaches that previously predominated. However, the effectiveness of this regulatory architecture depends critically on implementation quality, administrative capacity, and genuine commitment to worker protection rather than mere symbolic gestures.

The tension between platform business models predicated on labour cost minimization and worker demands for decent work conditions, fair compensation, and social security will likely persist, requiring ongoing legislative refinement, judicial interpretation, and stakeholder dialogue. As India’s gig economy continues its rapid expansion, the choices made in structuring aggregator contributions and worker protections will determine whether gig and platform workers gain a pathway to economic opportunity and security or face mechanisms perpetuating precarity and exploitation. The legal framework governing aggregator contributions, though promising in conception, must be translated into meaningful worker welfare improvements through diligent implementation, adequate funding, accessible administration, and sustained political will.

References

[1] NITI Aayog, “India’s Booming Gig and Platform Economy,” June 2022. https://www.niti.gov.in/sites/default/files/2022-06/Policy_Brief_India%27s_Booming_Gig_and_Platform_Economy_27062022.pdf

[2] Ministry of Labour and Employment, Government of India, “The Code on Social Security, 2020,” https://labour.gov.in/sites/default/files/SS_Code_Gazette.pdf

[3] “Code on Social Security, 2020 and Gig Workers,” Drishti IAS, https://www.drishtiias.com/daily-updates/daily-news-analysis/code-on-social-security-2020-and-gig-workers

[4] “Regulation of Gig Work,” ICRIER Policy Bank, February 2025. https://icrier.org/policy_bank/regulation-of-gig-worker/

[5] “Karnataka Platform-Based Gig Workers Bill,” PRS Legislative Research, https://prsindia.org/bills/states/the-karnataka-platform-based-gig-workers-social-security-and-welfare-bill-2025

[6] “Telangana Gig and Platform Workers Bill,” PRS Legislative Research, https://prsindia.org/bills/states/the-draft-telangana-gig-and-platform-workers-registration-social-security-and-welfare-bill-2025

[7] “Indian Federation of App-Based Transport Workers v Union of India,” BIICL Gig Workers Litigation Database, https://www.biicl.org/gig-workers-litigation-database/indian-federation-of-app-based-transport-workers-v-union-of-india-2021

[8] “Gig Workers Secured Under New Labour Codes as Aggregators Must Pay 2% of Turnover,” Outlook Business, November 21, 2025. https://www.outlookbusiness.com/start-up/news/gig-workers-secured-under-new-labour-codes-as-aggregators-must-pay-2-of-turnover

[9] “Rules Governing India’s Gig Economy,” International Bar Association, https://www.ibanet.org/rules-governing-india-gig-economy

The post The Legal Framework Governing Aggregator Contributions for Gig and Platform Workers in India appeared first on Bhatt & Joshi Associates.