Navigating federalism and prioritising workers in India's planned gig worker legislation

With the central government contemplating legislation to protect an estimated 7.7 million gig workers, the country is at a critical juncture. This proposal represents a potential global first: a dedicated national strategy for gig worker welfare. While this presents a tremendous opportunity, we must approach it with a sense of guarded optimism, particularly regarding the delicate balance of federalism in labour legislation.

The federalism conundrum

Labour falls under the Concurrent List of the Indian Constitution, allowing both central and state governments to legislate on labour issues. In cases of conflict, central legislation typically takes precedence.

Several states have already taken progressive steps in regulating the gig economy. Rajasthan passed the Platform-Based Gig Workers (Registration and Welfare) Act in July 2023, while Karnataka and Jharkhand proposed draft Bills this year. These state-level initiatives often address crucial aspects such as grievance redressal, algorithmic transparency, and fair work practices.

The central government's initiative must build upon these state-level innovations, setting a national baseline that incorporates the most progressive elements from various state laws. The guiding principle should be an expansion of rights, not their limitation. This approach ensures that the central law serves as a floor, not a ceiling, for worker protection.

From what we know so far, the central Bill will likely follow the general outline established by the Rajasthan Bill, including the establishment of a social security fund financed by a 1-2% cess on transactions or platform revenue. With most gig unicorns in India struggling to reach profitability, the cess may be levied on transactions. To build a meaningful fund, any cess must account for the total transaction cost, not just the delivery fee. If implemented well, this structure could provide a solid financial foundation for worker protection at the national level.

However, the central legislation shouldn't stop there. Karnataka's draft Bill, for instance, mandates transparency in the parameters used to determine work allocation, earnings, and ratings, while giving workers control over their personal data. The central legislation should go further.

The planned Bill presents a unique opportunity to open the black box surrounding gig work platforms. It allows us to mandate real-time transparency around task-related information and legally enable algorithmic audits to ensure platforms aren't harming workers. Crucially, the legislation should establish clear platform liability for injuries sustained when workers are online and engaged in searching for or performing service delivery.

Preserving state autonomy and prioritising workers

While central legislation will take precedence, it must be crafted to avoid neutering existing state efforts. The gig workers' welfare board, as proposed in the Rajasthan Bill, is one such feature that must be protected.

A food delivery worker in Mumbai faces different challenges than a ride-hailing driver in rural Bihar. State governments are better placed to understand these nuances and for this reason, welfare boards should continue to operate at the state level, maintaining the diversity of stakeholders as envisioned in state drafts.

Furthermore, the law should explicitly allow states to provide additional protections, and devolve the funds necessary to do so. Not only does this pay due respect to the federal structure but more critically, it acknowledges states' contextual understanding of local labour dynamics.

Most critically, as the central government moves forward, workers' voices must be prioritised in the consultation process. Organisations like the All India Gig Workers Union should have a prominent seat at the table. Their on-ground experiences and insights into state-level regulations can provide invaluable input for crafting effective national policy.

The government must also consider research produced by and in collaboration with worker organisations. Surveys co-created with the Indian Federation of App-Based Transport Workers offer deep insights into the real-world challenges of gig workers. The Fairwork Project, which evaluates working conditions across major digital platforms in India, can offer valuable benchmarks for the proposed legislation.

Setting up dedicated forums or town halls where gig workers can directly share their experiences would provide grassroots input that might be missed in high-level policy discussions. This approach recognises workers as active participants in shaping policy, with valuable expertise derived from their daily experiences.

The way forward

As India potentially sets a global precedent with this legislation, the stakes are high. Done right, this could significantly improve the lives of millions of gig workers and set a model for other countries to follow. Done poorly, it risks undermining existing protections and stifling future progress.

The path forward requires careful balance and inclusive dialogue. It must respect India's federal structure, preserve and build upon state-level innovations, and truly prioritise worker welfare and worker-produced knowledge. By adhering to these principles, India has the opportunity to create truly groundbreaking legislation.

As this process unfolds, civil society, workers' organisations, and citizens must remain engaged and vigilant. Our collective input and oversight can help ensure that this landmark opportunity translates into meaningful protections and improvements for gig workers across India. The future of work is being shaped now, and it's our responsibility to ensure it's a future that values and protects all workers, regardless of where in India they may reside.

Vineet John Samuel is a doctoral fellow at the Hertie School, Berlin. The views expressed are personal