Turnover-based levy could offer fairer social security burden for gig workers

As India moves to operationalise social security provisions for gig and platform workers under the Code on Social Security, 2020, a seemingly technical design decision threatens to create substantial disparities across the platform economy. The choice between contribution mechanisms—whether aggregators should contribute based on annual turnover or as a percentage of individual worker payouts—carries outsized consequences for different business models.

Under the existing framework, aggregators are required to contribute to a Social Security Fund for gig workers. A worker becomes eligible for benefits after 90 days of engagement with a single aggregator, or 120 days across multiple aggregators, within a financial year. However, the method by which aggregators calculate their contributions remains under scrutiny.

Industry analysts and sources argue that a contribution mechanism tied to individual transactions rather than an aggregator's overall turnover could create uneven financial burdens across the platform economy. Businesses built on high transaction volumes with low-ticket sizes would face particularly acute pressure under such a structure, potentially disadvantaging specific platform segments relative to others.

A turnover-linked levy, by contrast, would distribute the social security burden more proportionally across aggregators based on their overall business scale rather than transaction frequency. This approach could provide greater equity among platform operators while ensuring gig workers receive consistent social security protections regardless of the business model employed by their aggregators.