Code On Social Security, 2020: Towards Inclusive Social Security For India’s Workforce – IMPRI Impact And Policy Research Institute

Policy Update
Vishal Kumar

Background

The global labour market has undergone a fundamental transformation since the 2008 global financial crisis. Traditional employment relationships have increasingly given way to flexible platform-mediated forms of work collectively referred to as the gig economy. In India, this transition has been driven by rapid urbanisation, widespread smartphone adoption and the expansion of the digital economy. Gig work refers to income-generating activities performed outside conventional employer-employee relationships. It includes platform-based work facilitated through digital applications such as Swiggy, Zomato and Uber as well as non-platform gig work, including casual wage labour and freelance services.

The gig economy has expanded rapidly over the past decade. According to NITI Aayog, approximately 7.7 million workers were engaged in the gig economy in 2020-21. This number is projected to increase to 23.5 million by 2029-30. This threefold increase is expected to intensify concerns over income security, social protection and labour rights, highlighting the urgency of establishing a comprehensive and enforceable social security framework for gig workers. Although the COVID-19 pandemic accelerated the growth of platform-based work, it also exposed the limited social protection available to gig workers.

Unlike workers in the formal sector, most gig workers are classified as independent contractors rather than employees. This creates a regulatory gap because existing labour laws were largely designed around a clear employer-employee relationship, with an identifiable employer responsible for wages, working conditions and social-security contributions.

Gig and platform workers, by contrast, are generally engaged through contractual arrangements with platforms that characterise themselves as intermediaries rather than employers. Consequently, workers may remain economically dependent on platforms while falling outside several statutory protections available to conventional employees, including health insurance, pensions and unemployment protection.

Existing labour laws were therefore inadequate to address the distinctive features of platform work, including flexible engagement, algorithmic management and the absence of a conventional employer-employee relationship. This regulatory gap has generated increasing legal and policy debates across the world. In India, gig workers have approached the Supreme Court seeking recognition as unorganised workers entitled to statutory social security benefits. Against this backdrop, it becomes pertinent to examine the emerging regulatory framework concerning gig workers in India.

Functioning

The regulatory framework for extending social security to gig workers in India is anchored in the Code on Social Security (CoSS), 2020. This legislation represents the first formal recognition of gig and platform workers under Indian labour law. The framework is operationalised through four interrelated components that collectively govern the financing, registration, institutional oversight and delivery of social security benefits for gig and platform workers. These components are discussed below:

1. The Aggregator Model: Digital platforms are required to contribute between 1% and 2% of their annual turnover to a dedicated Social Security Fund, subject to a ceiling of 5% of the total amount payable to gig and platform workers. Unlike several European countries, where platform workers are increasingly being integrated into employer-funded social insurance systems following worker reclassification, India’s approach relies on a dedicated welfare fund financed through mandatory platform contributions. While this model is better suited to the flexible nature of platform work, questions remain over whether the prescribed contribution rates will generate sufficient and sustainable resources to provide comprehensive social protection as the gig workforce continues to expand.
2. Registration and Unique ID: The existing framework relies on Aadhaar-based self-registration through the e-Shram portal. Registered workers are issued a unique identification number that remains valid across multiple digital platforms. This registration serves as the entry point for accessing and delivering social-security benefits, enabling workers to be identified, tracked and linked with eligible welfare schemes and benefits.
3. State-Level Legislation: Several states have enacted independent legislative measures in response to the delayed operationalisation of the CoSS.  The Rajasthan Platform-Based Gig Workers (Registration and Welfare) Act, 2023, was the first to establish a dedicated Welfare Board and introduce a transaction-based welfare cess. Similarly, the Karnataka Platform-Based Gig Workers Bill, 2025, proposes mandatory notice periods before termination and greater transparency in algorithmic management.
4. Scope of Benefits: The proposed social security framework covers life and disability insurance, health and maternity benefits and old-age protection. It also provides the foundation for extending additional welfare measures to gig and platform workers as implementation progresses.

Performance

The implementation of social security measures for gig and platform workers remains at an early stage, although the institutional and regulatory framework has developed considerably since 2025. The Code on Social Security, 2020 (CoSS) came into force on 21 November 2025 and formally extended the social security framework to gig and platform workers. It provides for schemes covering life and disability, accident insurance, health and maternity benefits and old-age protection, supported by a dedicated Social Security Fund.

The subsequent Social Security (Central) Rules, 2026 have further specified the administrative arrangements for aggregator registration, worker-data sharing and contribution assessment. However, the principal implementation challenge has shifted from legislative recognition to the effective registration of workers, collection of contributions and delivery of benefits at scale. The current performance can therefore be assessed through the following indicators:

Worker Registration: Registration has expanded through the e-Shram portal, but coverage remains considerably below the estimated size of the gig workforce. The Ministry of Labour and Employment reported that around 5.12 lakh platform workers were registered on e-Shram as of 1 December 2025, following nationwide registration campaigns. This compares with NITI Aayog’s estimate of 7.7 million gig and platform workers in 2020-21, projected to reach 23.5 million by 2029-30. The gap indicates that formal identification has progressed, but a substantial proportion of the workforce remains outside the national registration system. The government has also integrated aggregator onboarding with e-Shram and created a dedicated module for aggregators, while the 2026 rules require aggregators to periodically share worker information electronically.

Operationalisation of Welfare Institutions: State-level institutional development has been more advanced than nationwide benefit delivery. Rajasthan enacted the Platform Based Gig Workers (Registration and Welfare) Act, 2023, establishing a Welfare Board, a dedicated social security and welfare fund, mandatory registration of aggregators and workers, and a transaction-based welfare fee. The Act also provides for a unique identification system and grievance redressal mechanism. However, the existence of legislation has not automatically translated into implementation. Reporting in January 2026 indicated that Rajasthan, despite being the first state to enact dedicated legislation, had still not achieved full implementation of its framework. This illustrates the wider gap between institutional creation and operational delivery.

Platform Compliance: Compliance is gradually becoming more formalised, but implementation remains uneven. The 2026 central rules require aggregators to register on the designated portal, maintain worker information and submit contribution assessments. They also require aggregators to update worker particulars periodically, with failure to update potentially affecting eligibility for social security schemes. The contribution mechanism provides for assessment based on the notified percentage of annual turnover, subject to the statutory ceiling of 5% of the amount paid or payable to gig and platform workers. This represents a significant movement from voluntary compliance towards enforceable obligations, although the effectiveness of the framework will ultimately depend on the extent to which platforms actually register workers, disclose relevant data and make contributions.

Financial Disclosures: Corporate financial disclosures provide an additional indicator of the wider financial consequences of the new labour framework, although these figures should not be treated as direct contributions to gig-worker welfare. In the December 2025 quarter, Tata Consultancy Services recognised a ₹2,128 crore statutory impact arising primarily from higher gratuity and compensated-absence liabilities following changes introduced by the labour codes. Infosys separately recognised an exceptional item of ₹1,289 crore relating to the impact of the new labour framework.

HCLTech, Wipro and other major IT companies also reported substantial one-off provisions. These disclosures demonstrate that the new labour framework is already producing measurable financial effects for large employers, although they primarily concern employee-benefit liabilities and should therefore be distinguished from the aggregator contributions specifically envisaged for gig and platform workers.

Voluntary Welfare Initiatives: Platform-level welfare measures have provided some protection even before the full implementation of statutory social security mechanisms. Ola, for example, established a ₹20 crore Drive the Driver Fund, while Swiggy has provided accident, disability and hospitalisation-related insurance to delivery partners, with the premium covered by the company. Swiggy’s reported insurance package included accidental coverage, accidental death and disability cover, loss-of-pay compensation and hospitalisation benefits for dependants. These initiatives indicate that platforms have developed welfare arrangements independently of statutory regulation. Their principal limitation, however, is that coverage and benefit levels depend on individual platform policies and therefore lack the uniformity, portability and statutory enforceability associated with a comprehensive social security system.

Early Implementation Experience: Rajasthan provides the clearest illustration of the difference between legislative innovation and implementation capacity. Its 2023 Act provides for automatic registration of platform workers, a unique ID, aggregator registration, a welfare fee linked to transactions, a dedicated welfare fund and institutionalised grievance redressal. Yet the experience also demonstrates the administrative difficulties involved in translating these provisions into functioning welfare delivery.

The January 2026 assessment that Rajasthan’s framework had not yet fully entered implementation suggests that the principal constraints lie in operationalising registration systems, integrating platform data, collecting welfare contributions and establishing mechanisms through which registered workers can actually access benefits. At the national level, the same problem is visible in the large gap between the estimated gig workforce and the number of workers registered on e-Shram. The performance of the emerging social security regime should therefore be assessed less by the number of laws and schemes announced than by the extent to which workers are registered, contributions are collected and benefits are actually delivered..

Impact

The emerging social security architecture is expected to strengthen labour protection and promote the gradual formalisation of gig work in India. However, it is important to distinguish between its actual impact so far and the expected impact of proposed reforms, as several measures remain at the implementation or legislative stage. Its impact can be examined through four broad dimensions, namely labour formalisation, social inclusion, financial empowerment, and improvements in working conditions:

1. Formalisation and Dignity of Labour: The statutory recognition of gig workers represents an important step towards extending labour protection to a previously unregulated workforce. The actual impact so far is reflected primarily in the formal identification and registration of gig workers through mechanisms such as the e-Shram portal, while broader improvements in social security and labour protection remain largely expected and dependent on effective implementation.
2. Gender and Social Inclusion: The CoSS provides a framework for extending social-security protection to gig and platform workers irrespective of gender. However, the impact on women’s participation and access to welfare remains largely expected, as it depends on the effective implementation of gender-sensitive provisions and the availability of suitable social-security benefits.
3. Financial Inclusion: The formal registration of gig workers can provide an identifiable record of their work and income, potentially improving access to institutional credit and other financial services. However, the effect on access to credit and reduction in dependence on informal finance remains an expected outcome rather than an established impact.
4. Work-Life Balance: Proposed reforms under state legislation, particularly the Karnataka Platform-Based Gig Workers Bill, seek to improve transparency in remuneration and establish safeguards against arbitrary termination. These measures have the potential to improve working conditions and reduce the physical and mental strain experienced by gig workers, but their impact should presently be regarded as prospective where the relevant provisions have not yet been fully implemented.

Emerging Issues

The transition towards a regulated gig economy has exposed several structural and implementation challenges. These issues continue to constrain the effective extension of social security to gig workers. While recent reforms have established an important legislative foundation, several regulatory, technological and institutional gaps continue to limit their effectiveness. The principal challenges are discussed below:

1. Algorithmic Oppression: Platform management continues to rely heavily on algorithmic decision-making with limited transparency. Digital platforms determine work allocation, remuneration and performance evaluation with minimal human oversight. The extensive collection and processing of workers’ personal, location and performance data also raises concerns regarding data sharing, privacy and the use of such information for automated decision-making. Existing social security measures also provide limited safeguards against arbitrary account suspension and inadequate grievance redressal.
2. The 10-Minute Delivery Trap: Ultra-fast delivery models have intensified occupational health and safety concerns. Strict delivery timelines expose workers to road accidents, air pollution and physical fatigue. These risks remain inadequately addressed within the current regulatory framework.
3. The “Dual Compliance” Burden: The coexistence of central and state-level regulatory frameworks has created compliance challenges for digital platforms. Differences in implementation and reporting requirements may increase administrative costs and regulatory uncertainty.
4. Misclassification and Arbitrage: The Code on Social Security recognises gig workers as a distinct category but does not classify them as employees. While this approach preserves labour market flexibility, it leaves unresolved questions regarding collective bargaining, trade union rights and employment protection.
5. Gender Invisibility: Policy discussions continue to focus primarily on location-based delivery workers. Consequently, the concerns of home-based and digitally mediated gig workers, many of whom are women, receive comparatively limited policy attention.

Way Forward

A comprehensive policy approach is required to strengthen social protection while preserving the flexibility of gig work. The following measures can improve the effectiveness and sustainability of India’s emerging social security framework.

1. RAISE Framework: NITI Aayog’s RAISE framework provides a comprehensive roadmap for policy reform. It emphasises Recognising diverse forms of gig work, Allowing innovative financing mechanisms, Incorporating platform interests, Supporting subscription-based welfare models and Ensuring universal accessibility.
2. Single-Window Governance: India should establish a unified system for compliance and benefit delivery. Integrating the Central Board, Employees’ State Insurance Corporation (ESIC) and State Welfare Boards would improve administrative coordination and reduce compliance burdens.
3. Portable and Adaptive Benefits: Social security benefits should be made portable across digital platforms and states. Such a framework would enable workers to accumulate benefits irrespective of changes in platform affiliation or place of work.
4. Transparency in AI: Governments should require digital platforms to adopt transparent and accountable algorithmic management practices. Greater transparency would reduce the risk of discriminatory outcomes and strengthen procedural fairness.
5. Universal Social Security: The ultimate goal should be a universal safety net that provides a “decent standard of life” as envisioned in the Directive Principles of the Indian Constitution. Such a framework would ensure minimum social protection for all workers regardless of their employment arrangement.

Platform management continues to rely heavily on algorithmic decision-making with limited transparency. Digital platforms determine work allocation, remuneration and performance evaluation with minimal human oversight. The extensive collection and processing of workers’ personal, location and performance data also raises concerns regarding data sharing, privacy and the use of such information for automated decision-making. Existing social security measures also provide limited safeguards against arbitrary account suspension and inadequate grievance redressal. Ultimately, legal recognition of gig workers does not by itself ensure effective social-security delivery; a gap may persist between worker registration, contribution to social-security mechanisms and the actual delivery and utilisation of benefits.

References

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5. Dewan, S. (2023, August 25). Big Problems, Small Wins: Social Security for Rajasthan’s Gig Workers. The India Forum. https://www.theindiaforum.in/article/big-problems-small-wins-social-security-rajasthan-gig-workers
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13. PRS Legislative Research. (2023). The Rajasthan Platform Based Gig Workers (Registration and Welfare) Act, 2023. https://prsindia.org/files/bills_acts/acts_states/rajasthan/2023/Act29of2023Rajasthan.pdf
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About the Contributor:

Vishal Kumar is a Research & Editorial Intern at IMPRI. He is currently pursuing a Master’s degree in Political Science at the University of Jammu, Jammu and Kashmir. His research interests include Political Economy, Public Policy, governance and Political Philosophy.

Acknowledgement:

The author would like to extend his gratitude to the reviewers and IMPRI for their guidance throughout the process.

Disclaimer:

This article is intended for academic purposes only. The views expressed are those of the author and do not necessarily reflect the views of IMPRI or any government institution.   

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