A gig economy is a work environment where organizations hire temporary workers or freelancers instead of full-time long-term employees. The trend is very strong in advanced economies like the US and European countries where firms engage in short term contracts with workers. Globally, growth in freelancers is expected to be one of the most significant employment related trends over the next couple of decades. In India too, the signs of freelancing is becoming increasingly relevant and attracting professionals

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The challenges posed by Gig economy:

• It is making the work environment uncertain for the workers
• No labour welfare emoluments like pension, gratuity etc.
• Gig workers miss out on statutory safeguards with respect to unfair termination, minimum wages, paid leave, etc.
• Workers do not have the bargaining power to negotiate a fair deal with their employers.
• Banks and other financial service providers resist extending lines of credit when steady income is not assured
• In situations where teamwork is essential, gig worker teams formed and disbanded on a case-to-case basis will likely produce tardy, inconsistent and poor output
• Unionization of workers will be difficult.
• In industries such as information technology and pharmaceuticals where confidentiality becomes crucial, having control over the actions of a gig worker will be challenging.

Challenges in India:

• Minimum wages in India are woefully low. Earning an ‘employee’ status may not entitle them to more than what they currently make.
• Outside social security net: Social security laws like the EPF and ESI currently only cover employees earning below Rs 15,000 and Rs 21,000 per month, respectively.
• If drivers earn more, they may not be entitled to these benefits, even after they get employment status, leaving them in a position that isn’t significantly better than before.
• Most Indian employment laws expressly prohibit dual employment, i.e. individuals cannot carry out two jobs if the total working hours exceed 8-9 hours a day based on location.
• Many gig workers work with multiple apps at the same time to supplement their income, which may become harder or illegal to do if they attain employment status with app operators.
• Security: A big drawback for a gig economy system was the lack of security for workers. Those working in the gig economy do not enjoy the same rights and protections as employed workers, such as health benefits, overtime pay and sick leave pay.

Measures needed:

• Basic labour protection like minimum wages, paid leave provisions and maternity benefits should be available to gig workers as well.
• The proposed Code on Wages and the Labour Code on Social Security are steps in the right direction.
• The state should balance the interests of business exigencies and social welfare.
• India can engage with the European Union and the United States, where discussion on protections in a gig economy is already underway.
• The government need to redefine labour laws that must not stifle innovation but certainly prevent exploitation.

Conclusion:

The government needs to step in, not to regulate away flexibility but to build worker and workplace protection into the system. The business, as well as welfare considerations of the workers, should be well balanced.