Union Labour Ministry sets up social security Boards for unorganised, gig, platform workers

Why in news?

Labour Ministry notified two National Social Security Boards for unorganised and gig-platform workers under the Code on Social Security, 2020.

UPSC Relevance

Prelims – Social Security Board, Code on Social Security 2020. 

Mains – GS2: Welfare schemes for vulnerable sections, statutory bodies, federalism 

GS3: Indian economy, employment, inclusive growth and issues of the informal sector.

The New Social Security Boards

• The four Labour Codes came into force in November 2025. One year later, the Ministry has notified the two Boards that the Code on Social Security requires to design and monitor welfare schemes.
• The Ministry calls it a historic shift that brings gig and platform workers into India’s formal welfare system for the first time.

Key facts about the Boards

• Composition – Members include Central and State government representatives, aggregator companies, employers, civil society, workers’ unions and associations of gig and platform workers.
• Who is on board – Labour Department officers of Maharashtra, Uttar Pradesh, West Bengal, Andhra Pradesh and Gujarat; Bharatiya Mazdoor Sangh; Laghu Udyog Bharati; aggregators such as Eternal (Zomato), Swiggy, Zepto, Urban Company and Rapido; the Indian Federation of App-Based Transport Workers; V.V. Giri National Labour Institute; and Dattopant Thengadi National Board for Workers Education and Development.

Functions of the Boards

• Recommend suitable schemes for different sections of unorganised, gig and platform workers.
• Advise the Union Government on administration of the Social Security Code.
• Monitor welfare schemes for these workers and review record-keeping at the State level.
• Review expenditure from the Social Security Fund and its accounts.
• Do any other work assigned by the Union Government from time to time.

Provisions of the Code on Social Security, 2020

• Merger of laws – Combines nine laws, including the EPF Act 1952, ESI Act 1948, Employees’ Compensation Act 1923, Maternity Benefit Act 1961, Payment of Gratuity Act 1972 and the Unorganised Workers’ Social Security Act 2008.
• New definitions – For the first time, Indian law defines gig worker (works outside a traditional employer-employee relationship), platform worker (works through an online platform) and aggregator (a digital intermediary connecting buyers and service providers).
• Aggregator contribution – Aggregators must contribute 1-2% of their annual turnover, capped at 5% of the amount paid or payable to gig and platform workers, towards a Social Security Fund.
• Social Security Fund – To be set up for unorganised, gig and platform workers, funded by Central and State governments, aggregator contributions, CSR funds and other sources.
• State Boards – States are to set up State Social Security Boards for unorganised workers, with similar functions at the State level.
• Registration – Unorganised, gig and platform workers must register on a portal (e-Shram) with Aadhaar to get benefits.
• Wider coverage – ESIC coverage can be extended to all districts and voluntarily to establishments with fewer than 10 workers. Gratuity for fixed-term employees after one year of service.

What is social security ?

• ILO definition – Protection that a society provides to individuals and households to ensure access to health care and guarantee income security, especially in old age, unemployment, sickness, invalidity, work injury, maternity or loss of a breadwinner.
• ILO Convention 102 (1952) – Sets minimum standards for nine branches of social security. India has not ratified it.
• Constitutional basis – Article 38 (welfare State), Article 41 (public assistance in old age, sickness, unemployment), Article 42 (maternity relief), Article 43 (living wage). Social security and social insurance are in the Concurrent List (Entry 23), along with welfare of labour (Entry 24).

Why it matters

• Large informal workforce – Over 90% of India’s workforce is informal, with no written contract, paid leave or pension.
• Protection from shocks – Illness, accidents and job loss push families into poverty. High out-of-pocket health spending is a major cause.
• Ageing population – The share of elderly is rising, and most workers will retire without any pension.
• Rise of the gig economy – NITI Aayog (2022) estimated 77 lakh gig workers in 2020-21, likely to reach 2.35 crore by 2029-30. They have flexible work but no employer-linked benefits.
• Productivity and growth – A secure worker is a healthier and more productive worker. Social security also supports consumer demand.
• Women workers – Most women work in informal jobs – domestic work, home-based work, farming – with no maternity or old-age protection.

Status of social security in India

• Coverage claims – The Union Government says social security coverage rose from 19% in 2015 to 64.3% in 2025, covering about 94 crore people, as recognised by the ILO.
• Reality check – Much of this counts people covered by at least one scheme – such as free ration or health insurance – not full social security in the ILO sense.
• e-Shram – Launched in 2021 as a national database of unorganised workers. Over 30 crore workers have registered, but registration has not automatically meant benefits.
• Gig workers – Budget 2025-26 announced identity cards, e-Shram registration and health cover under PM-JAY for about one crore gig and platform workers.
• State initiatives – Rajasthan passed India’s first law on gig workers in 2023, followed by Karnataka in 2025, with welfare boards and cess on aggregators.

Challenges

• Centralised Boards – Both Boards are chaired and nominated by the Union Government. There is little space for Central Trade Unions from the opposition side or for opposition-ruled States, though labour is a Concurrent subject.
• Weak worker voice – Only 7 of 40 members in one Board and 5 of 22 in the other represent workers.
• Schemes, not rights – Most benefits depend on schemes that can be changed by notification, not on legal entitlements.
• Unclear employment status – Gig workers are not treated as employees, so they do not get minimum wages, ESI or PF as of right.
• Low uptake – Voluntary contributory schemes like PM-SYM have seen low enrolment and high dropout, because informal incomes are irregular.
• Funding gaps – Aggregator contribution is capped and the Social Security Fund depends heavily on budget support. BOCW cess funds have remained largely unspent in many States.
• Portability – Migrant workers lose benefits when they move between States, since schemes are State-specific.
• Digital exclusion – Aadhaar-based registration and online processes leave out workers with low digital literacy.
• Federal concerns – A report by Justice V. Gopala Gowda for the Kerala Government (March 2026) flagged anti-federal and anti-worker features in the Code and suggested amendments.

Committee recommendations

• Note – The NCEUS report led to the Unorganised Workers’ Social Security Act, 2008, but many of its core suggestions, especially universal minimum cover as a right, still remain unaddressed.

Way forward – strategies

• Make Boards more representative – Include Central Trade Unions across the spectrum, all States by rotation and independent experts. Make Board meetings and decisions public.
• Cooperative federalism – Activate State Boards, share funds fairly and allow States to design schemes suited to local needs.
• Universal minimum floor – Move towards a legal floor of health, life, disability, maternity and old-age cover for all workers, as suggested by NCEUS and the ILO’s Social Protection Floors Recommendation (2012).
• Portable benefits – Link benefits to the worker through e-Shram and Aadhaar so they move with the worker across jobs and States.
• Fair contribution from platforms – Transaction-based levy on aggregators, as some States have done, with transparent use of funds.
• Ease of access – Assisted registration through Common Service Centres, worker facilitation centres and unions; auto-enrolment where possible.
• Use existing funds – Spend unutilised BOCW cess funds on construction workers’ welfare.
• Ratify ILO Convention 102 – Over time, align India’s system with global minimum standards.

The Boards are a good start, as they give unorganised and gig workers a place in the law. But a Board is only as good as its voices. Unless workers and States sit at the table as real partners, social security will remain a scheme on paper for most of India’s workforce.

Practice MCQ

Q1. With reference to the National Social Security Boards constituted under the Code on Social Security, 2020, consider the following statements:

1. Both Boards are chaired by the Union Minister for Labour and Employment.

2. The Board for Gig and Platform Workers has 22 members.

3. The Boards are required to meet at least once a year.

4. Under the Code, aggregators must contribute 1-2% of annual turnover, capped at 5% of the amount paid or payable to gig and platform workers.

How many of the above statements are correct?

(a) Only one

(b) Only two

(c) Only three

(d) All four

Answer: (c)

Explanation: Statement 3 is incorrect. The Boards will meet at least thrice a year.

Q2. Consider the following statements:

Statement-I: Both Parliament and State Legislatures can make laws on social security for workers.

Statement-II: Article 41 of the Constitution directs the State to provide public assistance in cases of old age, sickness and unemployment.

Which one of the following is correct in respect of the above statements?

(a) Both Statement-I and Statement-II are correct and Statement-II explains Statement-I

(b) Both Statement-I and Statement-II are correct but Statement-II does not explain Statement-I

(c) Statement-I is correct but Statement-II is incorrect

(d) Statement-I is incorrect but Statement-II is correct

Answer: (b)

Explanation: Both statements are correct. But the power of both Parliament and States to make such laws comes from Entry 23 of the Concurrent List, not from Article 41, which is a Directive Principle and is not enforceable.

Mains Practice Question

“The constitution of National Social Security Boards marks a step towards bringing unorganised and gig workers into India’s welfare framework, but structural gaps remain.” Discuss the status of social security for informal workers in India and suggest measures to make it universal and federal in spirit. (15 marks, 250 words)

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