India's gig and contract workforce is growing rapidly. From food delivery platforms and cab aggregators to freelance technology workers and on-demand professional services, the gig economy has become a significant part of India's labour market. In 2022, the Social Security Code's recognition of gig and platform workers as a distinct category has opened a new chapter in payroll and compliance management for businesses that use this workforce extensively. Understanding what is required - and what is coming - is important for any business with gig or contract workers.

The Current Gig and Contract Worker Landscape in 2022

India's gig economy is estimated to have grown to over 7.7 million gig workers as of 2020-21 per the NITI Aayog report, with rapid growth projected through 2030. Platform-based gig work in categories like transportation, food delivery, household services and content creation has expanded significantly in 2021 and 2022 as the economy recovered from pandemic disruptions.

  India's gig workforce was estimated at 7.7 million workers in 2020-21, projected to grow to 23.5 million by 2030. Gig workers as a percentage of total employment were approximately 1.5 percent in 2020-21. (Source: NITI Aayog, 2022 - 'India's Booming Gig and Platform Economy')

The Social Security Code and Gig Workers in 2022

The Social Security Code, 2020 is the first Indian statute to formally recognise gig and platform workers as a distinct employment category. The Code defines a gig worker as someone who earns outside of a traditional employer-employee relationship through work arrangements facilitated by digital platforms. Platform workers are those who access work through online platforms.

Under the Code, gig and platform workers are eligible for a range of social security benefits. The specific benefits and their funding mechanisms are to be defined through rules that are currently being developed. For platform aggregators, this will eventually create contribution obligations for their platform workers - a significant compliance development for businesses like cab aggregators, food delivery platforms and similar entities.

Contract Labour Compliance in 2022: What Principal Employers Must Track

For businesses that use contract workers - through staffing agencies, third-party contractors or direct fixed-term engagement - the compliance obligations are more immediate and fully active. The Contract Labour (Regulation and Abolition) Act, 1970 requires principal employers with 20 or more contract workers to obtain a Certificate of Registration. Contractors must hold valid licences.

Under the Social Security Code, if a contractor deploying workers at a principal employer's premises defaults on PF or ESIC contributions, the liability can extend to the principal employer in specific circumstances. Monthly contractor PF ECR verification is the primary protection mechanism.

Monthly contractor compliance actions in 2022

• Verify contractor PF ECR copies for workers deployed at your premises.
• Confirm contractor ESIC contributions for eligible deployed workers.
• Verify contractor licence validity.
• Maintain contractor wage register for deployed workers.
• Document verification in a monthly compliance record.

Payroll Outsourcing for Contract and Gig Workforce Management

Managing contract and gig worker payroll alongside the regular workforce requires a payroll system that handles multiple employment categories correctly. Variable compensation, different statutory applicability thresholds for different categories, contractor separation from permanent payroll and ESIC coverage verification all require expert management. A payroll outsourcing partner with experience in multi-category workforce management handles all of these as part of the monthly payroll cycle.

"In 2022, gig and contract workforce compliance is not an emerging issue to be monitored. It is an active obligation that requires monthly management."

Manage contract and gig worker payroll compliance with Kriotech. Visit kriotech.in

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