New Delhi: Rajasthan’s new legislation to provide social security to gig workers is an attempt by the state to cater to the needs of an emerging and growing segment of workers, a senior official in the state government has said, but industry players say its rollout should be calibrated to ensure that other states follow suit.

The Rajasthan state assembly Monday passed the Rajasthan Platform Based Gig Workers (Registration and Welfare) Bill 2023 which seeks to create a Gig Workers Welfare Board, ensure the registration of gig workers and platforms that employ them, and create a social security fund for the welfare of gig workers.

While social activists and workers’ rights bodies have welcomed the legislation, some recruitment platforms and platform aggregators have raised some concerns about particular elements of the law, especially a proposed fee that platforms will have to pay, which will ultimately go towards the social security fund.

While the legislation itself was passed without debate, Rajasthan Chief Minister Ashok Gehlot had in his Budget speech in February spoken about his intent to bring in such a law.

“Currently, companies like Ola, Uber, Swiggy, Zomato and Amazon, etc. have engaged young workers on contract on ‘per transaction’ basis,” Gehlot had said at the time, as per media reports. “Such workers are called gig workers. Like elsewhere in the world, the scope of ‘gig economy’ is continuously growing in the state.”

Gehlot added that there were “3-4 lakh” gig workers in the state and that “these big companies do not make any arrangements for social security for these gig workers”.

The Rajasthan Gig Workers Act 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 and who works on contract that results in a given rate of payment, based on terms and conditions laid down in such contract and includes all piece-rate work”.

The driving force behind the creation of such a legislation, considered the first of its kind in the country, is to address the needs of a growing segment of workers who currently don’t have social security, Arvind Mayaram, economic advisor to Gehlot and former Union finance secretary, told ThePrint.

“It’s very simple. The economy is throwing up new avenues of employment constantly,” he said. “When the factories came, then labour laws came in for organised labour, for example, and so gig workers are now a latest addition of a large and growing segment of workers that need legislation to ensure their rights.”

The Act provides for the creation of the Rajasthan Platform Based Gig Workers Welfare Board, which will comprise Rajasthan’s minister in charge of labour, and officials from the state’s labour, information technology, social justice and empowerment, transport, and finance departments.

The board will also include two representatives of the gig workers to be nominated by the state government and two other members from civil society.

The Act provides for the creation of a welfare fund for gig workers as well. This welfare fund — named the Rajasthan Platform Based Gig Workers Social Security and Welfare Fund — will be financed through a welfare fee paid by all platform aggregators operating in the state, grants-in-aid from the state government, and “other sources”, although the Act does not make clear what these might be.

The legislation stipulates that the ‘Platform Based Gig Workers Welfare Fee’ will be charged on “the value of each transaction related to platform-based gig worker”, and sets the rate at between 1-2 per cent.

Under the law, the aggregators have to provide the details of all the gig workers registered with them to the state government, and also have to register themselves. Using this, the state will maintain a database of both gig workers and aggregators, and the latter will be made public on its website.

Platform aggregators operating in the state are still formulating their strategy going ahead, but a few that ThePrint spoke to on the condition of anonymity, said that they will try to push for the proposed fee charged on them to be revoked or kept at minimal levels.

“The gig worker economy is still nascent, even if it is growing strongly,” a senior official from one such platform told ThePrint on condition of anonymity. “Nobody is questioning whether the workers deserve social security. Of course, they do. But right now, it would be a better idea if the provision of this social security is done by the state government. The platforms will be forced to pass on this fee to customers, which might impact the growth of the industry.”

Some recruitment platforms, however, take a contrary view, saying such a law could benefit these platforms in the long run.

“Aggregators should also see this as a long-term benefit, not a short-term loss, as it will make gig work more attractive and secure for job seekers,” Devashish Sharma, CEO and founding member of digital recruitment platform Taggd, told ThePrint.

The reason for this benefit, Sharma explained, was that such social protection would encourage more prospective workers to join the gig economy as a career choice, which would make available a large pool of talent for employers. This, in turn, could boost investment in the economy as foreign companies take note of this emerging resource pool.

That said, Sharma also emphasised the importance of Rajasthan getting the implementation right from the beginning.

“Otherwise, it runs the risk of not being adopted by other states,” he cautioned. “The state should first roll it out in one city, like Jaipur, and then replicate that model in the rest of the state, if it works.”