Introduction
The rapid proliferation of app-based platforms such as Uber, Ola, Zomato, Swiggy, and Blinkit has fundamentally altered the character of employment in India. Millions of delivery executives and cab drivers who power these platforms have, for long, existed in a legal grey zone rendering services that are indispensable to urban consumers, yet denied the most basic protections that formal employment affords. The questions of worker classification, social security entitlements, and platform accountability have, therefore, assumed considerable urgency in recent years.
Against this backdrop, India has undertaken one of the most sweeping reforms to its labour law architecture in its post-Independence history. With the enforcement of the Code on Social Security, 2020 and the three other Labour Codes on 21st November 2025, followed by the targeted implementation deadline of 1st April 2026, the question being actively debated across boardrooms, welfare boards, and courtrooms alike is whether Uber, Zomato, and Swiggy drivers finally secured the social security net they were long promised.
The Legal Vacuum Before 2025: Why Gig Workers Fell Through the Cracks
India’s pre-reform labour law regime, comprising nearly 29 central labour statutes, was constructed for a different era, one premised on a binary employment relationship between, a defined employer and a formal employee. The factories Act, 1948, the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, and the Employees’ State Insurance Act, 1948 all operated on this premise, thereby leaving app-based workers outside the ambit of statutory protection.
Gig workers were classified neither as ‘employees’ in the conventional sense nor as ‘independent contractors’ with enforceable rights. Platforms consistently maintained that they were merely technology intermediaries, and that the drivers and delivery executives using their applications were autonomous entrepreneurs. This characterisation, while commercially convenient, had the effect of excluding millions of workers from access to provident fund contributions, employee state insurance, gratuity, paid leave, and occupational health protection.
It may be noted that the NITI Aayog estimated that approximately 77 lakh workers were engaged in the gig economy in 2020-21, with projections indicating that this figure could exceed 2.35 crore by 2029-30. The magnitude of this workforce, combined with their structural vulnerability, rendered the absence of a legal framework a matter of pressing social and economic concern.
The Code on Social Security, 2020: A Landmark Recognition
The enactment of the Code on Social Security, 2020 (“Social Security Code”) marked a significant departure from the exclusionary tendencies of its predecessor statutes. For the first time in Indian legislative history, the Social Security Code formally recognised gig workers and platform workers as distinct categories of workers, thereby opening the gateway to social security coverage for this hitherto unprotected class.
The Code defines a ‘gig worker’ as a person who performs work or participates in a work arrangement and earns from such activities outside of a traditional employer-employee relationship. A ‘platform worker’, on the other hand, is defined as a person engaged in or undertaking platform work, meaning work based on online platforms enabling individuals to connect with organisations or individuals for specific services.
The key provisions under the Social Security Code that directly bear upon gig and platform workers are as follows:
- Aggregator Contribution Obligation: Digital aggregators including ride-hailing and food delivery platforms are required to contribute between 1% and 2% of their annual turnover, capped at 5% of the total amount paid or to gig and platform workers, to a dedicated Social Security Fund administered by the Central Government. This contribution is to be applied toward life and disability cover, accident insurance, health and maternity benefits, and old age protection.
- Worker Registration: Aggregators are mandated to register their platform workers on a centralized government portal (the e-Shram portal or a dedicated module under the Social Security Code), thereby ensuring traceability, accountability, and eligibility for benefits under the Social Security Fund.
- Portable Registration: Unlike the earlier framework under which benefits were tied to a specific employer, the Social Security Code envisages portable social security entitlements, enabling workers to carry their accumulated benefits across platforms and states.
- Government Co-contribution: The Central and State Governments are empowered to make matching contributions to the Social Security Fund, thereby supplementing the obligation placed on aggregators.
What Changed on 21st November 2025: From Paper to Enforcement
While the Social Security Code was enacted as early as 2020, its implementation was subject to protracted delays, primarily on account of the requirement for individual state governments to frame corresponding rules. This federal complexity resulted in a patchwork of compliance obligations and considerable regulatory uncertainty for platform companies operating across multiple jurisdictions. The position was decisively altered on 21st November 2025, when the Central Government brought the four Labour Codes into force, setting the stage for national compliance obligations.
It may be noted that the enforcement of the Social Security Code, read alongside the three other Labour Codes, creates a comprehensive matrix of obligations for gig platforms that goes significantly beyond the mere payment of welfare contributions. However, it is critical to clarify that:
- The Code on Wages, 2019 provides for universal minimum wage and floor wage coverage extending to gig workers, but does not impose the 50% basic pay rule (which applies only to traditional employer-employee relationships under the Code on Wages and the Code on Social Security for organised sector employees).
- The Industrial Relations Code, 2020 does not automatically classify gig workers as ‘employees’ for purposes of collective bargaining or retrenchment protection, unless a specific employment relationship is established through factual control and supervision tests.
- The Occupational Safety, Health and Working Conditions Code, 2020 (“OSH Code”) extends certain health and safety obligations to platforms, but its applicability to gig workers remains limited and subject to notified rules.
Implications for Platforms: Compliance, Costs, and Strategic Recalibration
For Uber, Zomato, Swiggy, and similarly situated aggregators, the implementation of the Labour Codes heralds a period of significant compliance complexity and financial recalibration. The obligation to contribute to the Social Security Fund, combined with the requirement to restructure engagement agreements and maintain accurate worker registries, represents a material departure from the operational models these platforms have relied upon.
It has been estimated that compliance with the wage restructuring provisions under the Code on Wages specifically the requirement that basic pay constitute at least fifty percent of total remuneration, could increase statutory costs for employers by five to fifteen percent in respect of permanent staff. For gig platforms, the equivalent impact will manifest through contributions to the Social Security Fund and the cost of administering benefit portability mechanisms.
Platforms may also be required to revisit their contractual frameworks with workers. Any contract term that is inconsistent with the provisions of the Labour Codes is rendered void by operation of law. Engagement agreements that characterise workers as independent contractors without corresponding welfare obligations will require careful review in light of the new legal position.
AMLEGALS Remarks
The statutory architecture is now comprehensively in place, with the Code on Social Security, 2020 and the April 2026 operationalization deadline marking a historic shift that mandates aggregators to contribute to the annual turnover to a dedicated Social Security Fund, requires worker registration on the e-Shram portal with portable benefits, and extends formal recognition to gig and platform workers for the first time. However, the gap between legislative intent and lived experience remains critical.
The efficacy will hinge on swift administrative implementation of the Social Security Fund and e-Shram integration, resolution of unresolved issues surrounding a 90-day eligibility threshold, contribution computation methodology, and the unsettled question of worker classification (employee vs. independent contractor), and a decisive shift by platforms from compliance avoidance to proactive engagement making 2026 the defining test of whether India’s labour law jurisprudence can deliver tangible protection to the millions who power the platform economy.
For any queries or feedback, feel free to connect with Hiteashi.desai@amlegals.com or Khilansha.mukhija@amlegals.com