Prepare regulation for the gig economy

Prepare regulation for the gig economy

IT companies in India are embracing the “gig economy”, marketing it as a great way to give workers and employers flexibility and as a pathway into the workforce for women. In this freelance economy, workers support themselves through a variety of part-time and short-term project-oriented jobs or gigs.
This move away from the traditional employment options has opened up exciting economic possibilities and innovation. Driven primarily by the young, more specifically millennials, this part-time/freelance model of employment allows workers a chance at the much vaunted work-life balance. For companies, it is an option to work around political and regulatory uncertainties in many economies. It gives companies the flexibility with regard to its workforce, contracting workers as the situation demands.
There are, however, some real hard questions about workplace protections and social security benefits. The gig economy views workers as independent contractors not employees. This allows for companies not to provide long-term savings options, healthcare, paid leave and other traditional social security benefits. The gig economy presumes every contracted worker has access to a robust safety net. This is a dangerous presumption. The much vaunted freedom for workers carries within it the potential for new precariousness and inequalities laying the ground for social disruptions.
Government needs to step in, not to regulate away flexibility but to build worker and workplace protection into the system. It should mandate portable retirement savings and health insurance payments, and the contracted wage should rise to incorporate these elements. India can engage with the European Union and the United States, where discussion on protections in a gig economy is already underway.