It has an enabling provision to empower the Centre to set up funds for providing social security to gig, platform, and unorganised workers.
This is the first time such workers will be covered under the social security law. Gig workers are usually spoken of in the context of the sharing economy, such as Uber, Ola drivers, and delivery persons for Zomato and Swiggy.
Essentially, these are jobs enabled by tech-enabled platforms where the worker is not bound to the organisation and can choose to work for as long they want, in a stint.
The Employees’ State Insurance (ESI) law will apply to establishments employing at least 10 workers. However, in hazardous industries, ESIC coverage will be extended to staff working in establishments with even one worker. An option has been proposed to allow companies with below 10 workers to provide benefits under ESI schemes.
Workers will get gratuity at the time of leaving the job if they have completed five years. However, workers on a fixed-term contract are proposed to be eligible for gratuity before completing five years, according to the Bill. Such workers will be given gratuity benefits on a ‘pro-rata’ basis.
The government has dropped a proposal to give options to private sector workers to switch away from Employees’ Pension Scheme and ESI schemes to other products.
The code is part of larger exercise of the government to codify 44 labour laws into four broad codes on wages, occupational safety, industrial relations and social security.