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Gig workers are on Covid frontline, they need legal rights and security

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The second wave of the Covid-19 pandemic has once again forced state governments to impose lockdowns across India’s major cities. People are working from home again, and shops and restaurants are shutting down to counter the seemingly unstoppable rise in Covid infections and deaths across the country. In this context, platform workers — who provide their services through apps — are again proving to be frontline workers in helping fight the pandemic.

With mobility limited, urban Indians are finding out how valuable door-step delivery services, especially in the context of food, groceries, medicines et al, actually are. While we value the services provided on the apps, do we adequately value the service providers — the platform workers — themselves?

un-appy: Several countries are moving to classify gig workers as employees with guaranteed rights

Platform workers do not enjoy all the rights that full time employees and workers do. While they do enjoy the flexibility in timings and earnings that their kind of work allows them to, there is no limit on the number of hours that they are required to work, no guaranteed minimum wage, no regular wage, no rights to bargain collectively, no government mandated health and safety standards, or even mandated days off work. These are demands that have been articulated by the platform workers themselves.

Acknowledging the contributions of platform workers therefore requires a recognition of their status and rights as workers. In countries such as the UK, Brazil and South Africa, courts and labour regulators are moving to classify platform workers as employees, guaranteed certain rights under law. An opportunity to do the same through the consolidation and codification of labour laws at the Union level has unfortunately been missed. Even though three major labour law codes (consolidating and making changes to the existing labour legislations) were passed last year, they contain little by way of legal protections for platform workers.

The Industrial Relations Code, 2020 applies only to “employees” working in an “industrial establishment”, which excludes platform workers since they don’t have a fixed place of employment. All the beneficial provisions relating to unionisation, collective bargaining and fair procedure for hiring and firing do not apply to them.

The Occupational Safety, Health and Working Conditions Code, 2020 likewise has no mention of platform workers. It applies to employees who are defined in the law as those who work on an “establishment” — again a defined place of work — for “wages” which necessarily exclude commission payments such as those received by platform workers. This once again means that the companies which run the apps have no obligation to ensure a safe and healthy working environment or compensate workers if they suffer any injury or death in the course of work.

Only the Code of Social Security, 2020 includes platform workers within its scope, but does so in an unsatisfactory manner. While it does define a specific category of workers as “platform workers” acknowledging the different nature of the work, it does not grant them the right to social security payments from the app companies. Rather, the code only requires the state and central governments to come up with “schemes” which are intended to provide for provident fund, life and disability cover et al. The code only outlines the bare-bones of such “schemes”, without imposing any firm obligations on the app companies themselves.

Even prior to these three codes, The Code on Wages, 2019 also excluded platform workers from its ambit in so far as it guarantees minimum wage and the manner in which an employee is entitled to be paid their wages.

Given how important platform workers have been in helping people stay indoors during the pandemic, it is unfortunate that they have been almost entirely excluded from the ambit of the four labour codes which constitute almost the entirety of the labour law in India. In the absence of labour laws covering them, the convenience that consumers enjoy and the revenues generated for the apps come at a cost which are borne almost entirely by platform workers. What the labour codes could have done is to shift the costs being borne by the platform workers to the companies which hire them by the app.

The recent self-immolation of a cab driver near the Bengaluru airport, apparently in desperation over the state of his finances, prompted the Karnataka government to increase fares in the hope that they get a better share from cab aggregators. While welcome, it still seems a knee-jerk reaction. It should not need such drastic actions on the part of platform workers to prompt lawmakers to enact suitable legislation. Recognising their basic human rights requires it.

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Views expressed above are the author’s own.



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Workers

Rep. McHenry introduces Gig Worker Equity Compensation Act

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U.S. Rep. Patrick McHenry (R-NC) introduced legislation that would include the gig workforce in the category of workers who can benefit from equity compensation.

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The Gig Worker Equity Compensation Act (H.R. 2990) would help gig workers share in the economic resurgence while preserving their flexibility and independence.

“How people choose to work is changing. Our technology-driven economy is embracing this shift, Washington needs to keep up,” McHenry, the Republican leader on the House Financial Services Committee, said. “By giving these non-traditional workers access to equity compensation—just like traditional employees—we can ensure they benefit from the growth of the companies they are making successful. While Democrats attempt to stifle this growing sector of the workforce, my bill ensures they retain the flexibility they need while giving them the opportunity to grow wealth. This is a win for our capital markets, job creators, and gig workers.”

McHenry points out that about a quarter of the U.S. workforce participates in the gig economy or non-traditional work — whether as a rideshare driver, food delivery courier, or sharing their property through a platform like Airbnb. Further, about 10 percent of workers rely on alternative work arrangements for their primary source of income. These workers do not want to be bound by constraints like an office, set hours, or a traditional employer-employee relationship. This bill seeks to provide additional flexibility to support these workers.

In November 2020, the Securities and Exchange Commission (SEC) voted to propose rules to provide equity compensation options for gig workers. McHenry welcomed this initiative and is committed to working with the SEC to implement his broader proposal.

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GigIndia to provide Rs 3 lakh insurance cover to active gig workers

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GigIndia, a B2B gig marketplace for on-demand work completion, will provide free COVID health insurance to its active gig workers covering up to Rs 3 lakh of medical expenses. Considering the adverse financial impact of COVID-19 on its gigger families, the Pune-headquartered firm in a release said that it is offering this insurance to active gig workers to make them feel relatively secure during these challenging times.

Moreover, the company is initiating efforts to ensure certified giggers on its platform continue receiving gigs (projects), thereby enabling a steady monthly income, it added.

“The COVID Health Insurance will ensure that medical costs are covered if any gig worker tests positive for COVID-19. We are also providing financial assistance to gig workers, which will help them with essential expenditure such as hospital charges, oxygen cylinders and ventilators, among others,” said Sahil Sharma, Co-founder & CEO, GigIndia.

Sharma said Rs 3 lakh covid health insurance will be given to thousands of active giggers on the company’s platform. In addition, the company has also set up an internal Rs 10 lakh covid relief fund for gig workers in need.

He further said that unlike full-time white/grey collar workers, giggers and grey collar part-time workers typically do not receive social security benefits and paid leave or access to health insurance.

According to Sharma, GigIndia is providing emergency loans for medical expenses, 100 per cent reimbursement of vaccination cost for all its employees and their family members, along with 14-days’ paid leave if an employee tests positive.

GigIndia said it empowers large enterprises to scale rapidly by providing a flexible workforce along with tech-enabled real-time tracking for work completion, remote customer onboarding, virtual customer support, recruitment on-demand, influencer marketing and field operations among others.

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Biden Administration Mulls Reclassifying Independent Gig Workers as Employees Nationally

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Lyft (NASDAQ:LYFT) and Uber Technologies (NYSE:UBER) may end up having to classify their drivers as employees after all.

Months after California voters overturned a controversial state law requiring gig-economy companies to reclassify their independent contractors as employees — which would have cost the companies hundreds of millions of dollars in pay and mandated benefits — the Biden administration is now considering imposing similar rules nationwide.

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Image source: Getty Images.

In an interview with Reuters last week, Biden’s Labor secretary, Marty Walsh, indicated his agency would explore forcing companies across the country to reclassify their workers.

Although Lyft and Uber are the most visible symbols of the cost and disruption such regulations impose, the change would actually stretch over large swaths of the economy, changing the relationships between workers and hundreds of professions, trades, and industries.

Not only would rideshare companies be impacted, but also any business with freelance workers — including food and grocery delivery drivers, publishers and newsrooms, trucking companies, and more — would be affected by the change. 

While framing it as a worker protection issue, Walsh said requiring companies to treat independent contractors as employees is really a means of ensuring company profit “trickles down to the worker.”

It’s estimated 43% of the workforce is employed in the gig economy, meaning a national policy of worker reclassification would dramatically affect the economy as well as undermine the concept of at-will employment.

Walsh’s comments are not policy proposals, but Lyft’s stock tumbled 10% while Uber fell 6% as investors surmised that the Labor secretary would be putting the regulatory framework into motion.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.



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