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Rajasthan passes Rajasthan Platform Based Gig Workers (Registration and Welfare) Act, 2023

Introduction

The Government of Rajasthan, on July 24, 2023, passed the Rajasthan Platform Based Gig Workers (Registration and Welfare) Act, 2023 (“Act”). With this initiative, Rajasthan has become the first state in India to pass a legislation, which regulates the engagement of gig workers and aims to provide social security and other benefits to platform-based gig workers.

While at the Central level, the Code on Social Security, 2022 (“SS Code”), recognises gig and platform workers (essentially those workers who work on online aggregator platforms) as a separate class of workers and seeks to extend a variety of benefits to them, the same is yet to be brought in force.

The Act applies to ‘aggregators’ (digital intermediaries connecting buyers and sellers) and ‘primary employers’ (individuals or organisations engaging platform-based gig workers). The definition of a ‘gig worker’ under the Act is broadly aligned with the SS Code and includes a person who performs work or participates in a work arrangement and earns from such activities outside the traditional employer-employee relationship. The Act also includes within its ambit (of gig workers), any person who works on a contract that results in a given rate of payment, based on the terms and conditions laid down in such contract and includes all piece-rate work. The provisions of the Act shall be deemed to have commenced on the 120th day from the date of enactment or on a date notified by the Government of Rajasthan bringing the Act into force, whichever is earlier.

Constitution of welfare board

The Act provides for constitution of Rajasthan Platform Based Gig Workers Welfare Board (“Board”), the stated duties and powers of which include: (a) registering platform-based gig workers, aggregators and primary employers operating in the State of Rajasthan; (b) ensuring that the welfare cess deduction mechanism is integrated into the application of the aggregator or primary employer; (c) notifying schemes for social security of registered platform-based gig workers; (d) ensuring that workers have access to benefits as per the schemes; and (e) engaging with registered unions working with platform-based gig workers and holding regular open consultations with them.

Registration of platform-based gig workers, aggregators and primary employers

The Act mandates that aggregators and principal employers register themselves with the Board and provide it with the latest data of all platform-based gig workers engaged by them within 60 (sixty) days from the date on which the Act comes into force.

All platform-based gig workers onboarded or registered with any platform will have to be registered with the Board by the aggregators or primary employers, which will be valid in perpetuity, irrespective of the duration or time of engagement, and each such platform-based gig-worker will be provided a Unique ID by the Board.

Platform-based gig workers fund and welfare cess

Every aggregator and primary employer shall be required to deposit by the 5th of every calendar month, a welfare cess known as the “Platform Based Gig Workers Welfare Cess” (at a rate as determined by the Government of Rajasthan), up to a maximum of 2% and minimum of 1% of the value of each transaction related to platform-based gig workers.

The Act envisages establishing a Rajasthan Platform Based Gig Workers Social Security and Welfare Fund, wherein all sums received from the welfare cess, contributions made by individual platform-based gig workers, sums received as grant-in-aid from the State Government, donations, etc., will be held, and utilised for the benefit of the registered platform-based gig workers.

Tracking and monitoring

All payments generated on platforms (essentially an online-transaction-based arrangement of work connecting service providers to service recipients) will be mapped to a Central Transaction Information and Management System (CTIMS) administered and monitored by the Board. The CTIMS will also monitor details of commission charged, GST deducted, welfare cess collected/ deducted/ spent etc. in connection with platform-based gig workers.

Grievance Redressal Mechanism

The Act grants rights to registered platform-based gig workers to file a petition before the relevant authority as designated by the Government of Rajasthan to raise any grievances relating to their entitlements, payments and other benefits under the Act.

Penalties

It is also worth noting that the Act sets out substantial monetary fines extending up to INR 50,00,00 for violations of the Act by aggregators and up to INR 2,00,000 for violations by principal employers.

Conclusion

With the rapid expansion of gig economy across the country, challenging conventional norms and structures of work, this could be a significant step by the Government of Rajasthan towards recognition of gig workers and facilitating the provisions of social security and other benefits to such workforce. This is a landmark initiative, which appears to be already motivating other States to bring about similar labour reforms towards the gig economy, with Karnataka also contemplating introducing a cess for transactions relating to platform-based gig workers, that is meant to go into a fund for their benefit.