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Platform cos to pitch in 5% of wages as social security

 New Delhi, 14 March 2021,Aggregators or platform companies, such as cab hailing and food delivery firms, will have to contribute 1-2% of their annual turnover, or 5% of the payments made to workers on their respective platforms, whichever is lower, to a designated fund managed by the Centre to provide social security benefits to contract or gig workers according to a report published in MINT.

According to the Code on Social Security, the government will “establish a social security fund for social security and welfare of unorganized workers, gig workers and platform workers," the Union labour ministry has informed Parliament.

 “The Code envisages a contribution between 1% to 2% of annual turnover of an aggregator, subject to maximum 5% of the amount paid or payable by an aggregator to gig and platform workers. This shall be credited to the social security fund," labour minister Santosh Gangwar told Parliament in a written reply.

The minister also informed that the standing committee on labour had recommended that the provisions for framing the schemes and constitution of the social security fund for gig and platform workers and unorganized workers should be aligned, and mentioned in the labour codes. India consolidated 29 labour laws into four broad codes on wages, social security, occupational health, and industrial relations, and the ministry is finalizing the rules for these codes.

Experts have debated over the years that the growth of the platform economy, there is a need for offering social security benefits to gig workers, who are neither considered part of the formal sector nor the informal sector.