Gig workers social security scheme may have multiple fund managers
The Ministry of Labour and Employment is actively designing the implementation architecture for a social security scheme covering gig and platform workers, w...
What Happened
- The Ministry of Labour and Employment is actively designing the implementation architecture for a social security scheme covering gig and platform workers, with a multi-fund manager framework under consideration to manage the accumulated corpus.
- The Employees' Provident Fund Organisation (EPFO) is expected to serve as the primary scheme manager, potentially alongside other fund management entities in a structure analogous to the National Pension System (NPS) model.
- The scheme design flows from the Code on Social Security, 2020, which for the first time included gig and platform workers within India's statutory social security architecture.
- Under the framework being finalised, gig workers must complete a minimum of 90 days of platform work in a financial year to qualify for benefits; for multi-aggregator workers, the threshold rises to 120 days.
- Aggregators (platform companies) are mandated to contribute 1–2% of their annual turnover — capped at 5% of payments made or payable to platform workers — into a dedicated Social Security Fund.
Static Topic Bridges
Code on Social Security, 2020
The Code on Social Security, 2020 is one of four labour codes that consolidate 29 pre-existing central labour laws. It subsumes nine earlier acts including the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, the Employees' State Insurance Act, 1948, and the Maternity Benefit Act, 1961, among others. Crucially, it introduces the first statutory definition and social security framework for gig and platform workers in Indian law.
- Gig worker defined: a person who performs work outside of a traditional employer-employee relationship and earns from such activity
- Platform worker defined: a person engaged in work arranged through an online platform, outside conventional employment
- Aggregator contribution: 1–2% of annual turnover, capped at 5% of total payments to gig/platform workers
- Benefits to be provided include life and disability cover, accident insurance, health and maternity benefits, and old age protection
- National Social Security Board to be constituted for gig and platform worker welfare
- e-Shram portal (launched August 26, 2021) serves as the national database for unorganised and platform workers
Connection to this news: The multi-fund manager structure and EPFO involvement being designed by the ministry are the operational implementation of the broad framework legislated in Chapter IX of the Code on Social Security, 2020.
EPFO and Fund Management in Social Security
The Employees' Provident Fund Organisation (EPFO) is the world's largest social security organisation by membership, administering provident fund, pension, and insurance benefits for organised sector workers under the EPF & MP Act, 1952. The National Pension System (NPS), by contrast, uses a competitive multi-fund manager model regulated by the Pension Fund Regulatory and Development Authority (PFRDA), where subscribers choose from empanelled pension fund managers.
- EPFO membership: over 70 million active contributors (organised sector)
- EPFO manages three schemes: EPF (Employees' Provident Fund), EPS (Employees' Pension Scheme, 1995), and EDLI (Employees' Deposit Linked Insurance)
- Employer contribution under EPF: 12% of basic wages (for establishments with 20+ employees)
- NPS multi-manager model: 7 empanelled pension fund managers, subscriber-chosen allocation
- PFRDA is the statutory regulator for NPS under the PFRDA Act, 2013
Connection to this news: The proposed multi-fund manager model for the gig worker scheme draws on the NPS architecture's competitive management framework, while leveraging EPFO's administrative scale — a hybrid approach intended to balance returns optimisation with institutional reach.
India's Gig Economy — Scale and Policy Context
India's gig and platform economy has grown rapidly, driven by sectors such as ride-hailing, food delivery, e-commerce logistics, and freelance digital services. A National Institution for Transforming India (NITI Aayog) report estimated 7.7 million gig workers in India in 2020–21, projected to reach 23.5 million by 2029–30. These workers have historically lacked access to formal social protection due to their classification as independent contractors rather than employees.
- Estimated gig workforce: 7.7 million (2020–21), projected 23.5 million by 2029–30 (NITI Aayog)
- Gig workers account for approximately 1.5% of India's total workforce (2020–21)
- Rajasthan became the first state to enact a gig worker law — Rajasthan Platform Based Gig Workers (Registration and Welfare) Act, 2023
- Karnataka and other states have proposed similar legislation
Connection to this news: The scale of the projected gig workforce and the absence of formal employer-employee relationships make a dedicated, aggregator-funded social security architecture both necessary and practically complex, driving the need for innovative fund management structures.
Key Facts & Data
- Minimum eligibility: 90 days of platform work per financial year (single aggregator); 120 days for multi-aggregator workers
- Aggregator contribution: 1–2% of annual turnover, capped at 5% of payments to gig workers
- India's gig workforce (2020–21): 7.7 million; projected 23.5 million by 2029–30
- Code on Social Security, 2020 — consolidates 9 central labour laws
- e-Shram portal launched: August 26, 2021
- Rajasthan Platform Based Gig Workers Act enacted: 2023 (first state-level gig law in India)