India’s labour law reforms mark a fundamental recalibration of how work is regulated in an increasingly digital and platform-driven economy. For corporates and legal advisors, these reforms go beyond legislative consolidation, introducing new statutory obligations, compliance risks, and governance considerations, particularly for gig and platform workers.
A clear understanding of these changes is essential for businesses engaging large, flexible workforces and for legal teams advising on workforce structuring and risk mitigation.
1. Statutory Framework: From Employment to Work-Based Regulation
The erstwhile 29 central labour laws have been consolidated into four comprehensive Labour Codes—
• Code on Wages, 2019
• Industrial Relations Code, 2020
• Code on Social Security, 2020 (CSS Code)
• Occupational Safety, Health and Working Conditions Code, 2020
This marks a shift towards uniform statutory definitions, technology-driven compliance mechanisms, and expanded regulatory coverage. While traditional employer–employee relationships remain foundational, the Codes consciously extend to non-standard forms of work.
For corporates, this means labour compliance can no longer be evaluated solely through conventional employment contracts.
2. Legal Recognition of Gig and Platform Workers
The Code on Social Security, 2020 formally incorporates gig workers and platform workers into the statutory framework:
• Section 2(35) – “Gig worker”
• Section 2(61) – “Platform worker”
• Section 2(1)(a) – “Aggregator”
This statutory recognition establishes a distinct legal category, separate from both employees and independent contractors. Although the Labour Codes do not reclassify gig workers as employees, they impose statutory obligations on aggregators regardless of contractual classification.
For legal advisors, this represents a clear shift away from the traditional reliance on contract law alone as the determinant of labour-related obligations.
3. Social Security Obligations and Funding Mechanism
Under Chapter IX (Sections 109–114) of the Code on Social Security, 2020 (“CSS Code”), the Central Government is empowered to formulate and notify dedicated social security schemes for gig workers and platform workers. These schemes may provide for, inter alia:
• life and disability insurance,
• health and maternity benefits, and
• old-age protection and pensionary support.
Historically, gig and platform workers remained outside the statutory social security framework, with access to welfare measures largely confined to voluntary schemes or corporate social responsibility initiatives, and without any statutory entitlement to provident fund, employee state insurance, pension, or insurance benefits. The Code on Social Security, 2020 marks a significant departure from this position by according formal statutory recognition to gig and platform workers and making them eligible for government-notified social security benefits, including accident insurance, health and maternity benefits, and such other benefits as may be prescribed.
Section 114 of the CSS Code further establishes a dedicated funding mechanism by requiring aggregators to contribute between 1% and 2% of their annual turnover, subject to a statutory cap linked to the aggregate payments made to gig and platform workers during the relevant financial year. This contribution framework integrates gig and platform workers into the formal social security system, effectively transitioning them from regulatory invisibility to recognised beneficiaries within a structured, state-backed social security regime.
Corporate Impact:
• Turnover-linked contribution requirements create direct and ongoing financial exposure.
• Non-compliance may trigger statutory penalties under Section 142.
• Platforms must ensure close coordination between finance, HR, and legal teams for accurate reporting and timely contributions.
4. Registration & Database
Gig and platform workers may self-register on the Government’s e-Shram portal, enabling the creation of a comprehensive national database to support social security coverage, skill development initiatives, targeted welfare delivery, and informed policymaking.
5. Portability of Benefits
Gig and platform workers can now retain their social security benefits even when switching jobs or platforms, ensuring continuity and security. Earlier, such benefits were typically lost upon changing engagements. Through registration on the e-Shram portal, each worker is issued a unique Aadhaar-linked identification number, enabling portability of social security benefits across platforms. As a result, whether operating on multiple platforms simultaneously or transitioning from one platform to another, workers uninterrupted access to a unified set of benefits.
6. Misclassification Risk and Judicial Scrutiny
Although the Labour Codes do not confer employee status on gig workers; the risk of judicial scrutiny remains significant. Courts may continue to assess:
• degree of control and supervision,
• algorithmic management practices,
• exclusivity and economic dependence.
Corporate legal teams must proactively assess platform structures and review contractual documentation to mitigate the risk of worker reclassification, especially as Indian courts increasingly consider global gig-economy practices.
7. Industrial Relations and Collective Rights Challenges
The Industrial Relations Code, 2020, excludes gig workers from the definition of “worker” under Section 2. Consequently:
• Gig workers currently do not have statutory collective bargaining rights.
• Traditional dispute resolution mechanisms may not apply to them.
This legislative gap could become a focal point for future litigation or policy reform, creating long-term legal uncertainty for corporates operating at scale.
8. State-Level Rules and Compliance Fragmentation
Labour being a Concurrent List subject, operational compliance will largely depend on state-specific rules issued under:
• Section 164 of the CSS Code, and
• equivalent provisions in the other Labour Codes.
Corporates operating across multiple states should anticipate:
• divergent registration and reporting requirements,
• inconsistent enforcement approaches, and
• higher coordination and compliance costs.
Legal advisors will be essential in mapping these differences and developing scalable, state-compliant frameworks.
9. Grievance Redressal
Previously, gig and platform workers lacked access to formal labour laws and, consequently had no structured grievance redressal mechanism. Under the Social Security Code, the relevant government may establish a toll-free helpline, call centre, or facilitation centre to address worker grievances and provide timely support.
Strategic Takeaways for Corporates and Legal Teams
The labour law reforms mark a fundamental shift from employment-centric regulation to a broader, work-centric framework. This transformation carries far-reaching implications for a wide spectrum of corporates, including infrastructure and construction firms, manufacturing enterprises, logistics and warehousing operators, IT and IT-enabled services, as well as platform-based and gig economy businesses such as Zomato, Swiggy, Uber, and other aggregators.
For traditional sectors such as infrastructure, real estate, and manufacturing—where much of the workforce is employed via contractors, sub-contractors, or project-based arrangements—the reforms require a thorough reassessment of workforce deployment, contractor liability, and compliance under the new labour codes.
For platform-based and technology-driven businesses, especially gig aggregators, the reforms bring new regulatory challenges, including worker classification, social security obligations, algorithmic governance, and platform accountability.
For legal advisors, these developments opens new advisory and litigation landscapes encompassing statutory interpretation, regulatory compliance, delegated legislation, and potential constitutional challenges. Proactive legal structuring, early compliance planning, and ongoing monitoring of subordinate legislation will be essential to manage risk and safeguard operational certainty. Advisors will play a pivotal role in guiding businesses through this evolving regulatory framework, ensuring both compliance and strategic advantage.