A Framework for Health Security in India’s Platform Economy: Learning from Global Approaches
- Aashnaa Mehta
- 32 minutes ago
- 10 min read
Executive Summary
The rise of the gig economy marks a transformative shift in global labour markets. Defined by short-term, task-based work facilitated through digital platforms, the model offers businesses and consumers efficiency and convenience, yet leaves many workers navigating a landscape marked by uncertainty. While platform work promises autonomy and flexibility, it often comes at the cost of basic labour rights, legal protections, and access to social security.
Governments worldwide are responding with varying strategies. Some, like South Korea, have adopted digital and legislative innovations to expand contributory insurance systems, leveraging real-time income data to streamline coverage. Others, such as California, have attempted hybrid solutions that blend independent contractor status with mandated benefits through measures like Proposition 22. Across the board, policy tools include tax-financed universal schemes, mandatory aggregator contributions, and the introduction of new legal classifications for platform-based work.
Findings indicate that a hybrid model, combining mandatory registration of gig workers, platform-contributed insurance, and targeted government co-financing, offers the most viable path for India. Tailored to the local context and built on international best practices, such a framework could close existing protection gaps before they become structurally embedded. With a relatively small share of the workforce currently reliant on gig work as their primary income, India has the unique opportunity to act preemptively, crafting a more inclusive and resilient system of healthcare and social protection for the platform-based economy.
Introduction
At the heart of the policy dilemma lies the classification of gig workers. Under common law, the distinction between an “independent contractor” and an “employee” hinges on the degree of control the employer exercises. When only the outcome of work is controlled, the individual is deemed an independent contractor. However, when both the outcome and the means of work are dictated, the law considers them employees - triggering a series of legal and welfare entitlements. (Malik, 2016) This distinction is contentious, as access to state and federal benefits often depends on this classification. With over 20% of the global workforce now falling under the “independent contractor” label, the implications for welfare access have grown urgent and wide-reaching.
India’s gig economy is expanding rapidly, driven by digital platforms that connect consumers to flexible, on-demand labour. While this model offers autonomy and income opportunities for workers, it often comes at the expense of job security, health coverage, and social protections. The nature of gig work has left a growing segment of the workforce without access to basic welfare benefits.
India’s gig workforce is projected to reach 23.5 million by 2029–30 (NITI Aayog, 2022). Recognizing this potential, the Indian government has taken initial steps to include gig and platform workers in national health schemes such as Ayushman Bharat. However, in the absence of a comprehensive insurance or social protection framework, these efforts remain fragmented. As India seeks to build a resilient and inclusive economic future, it is essential to draw lessons from global precedents. Countries like South Korea and the United States, specifically the state of California, have pioneered diverse models to extend healthcare, insurance, and social protections to gig workers. A comparative analysis of these strategies can offer critical insights for India’s evolving policy framework.
Research Overview
This policy brief employs a comparative case study methodology to examine international approaches to extending insurance and healthcare coverage to gig workers. The objective is to identify best practices and pitfalls that can inform India’s policy response toward financial and social inclusion in the platform economy.
The analysis draws on two contrasting models: South Korea, which has made significant strides in integrating gig workers into its National Health Insurance Service (NHIS), and California, where legal ambiguities around worker classification continue to hinder access to employer-provided benefits. These case studies have been selected to highlight both the possibilities of institutional integration and the risks of regulatory fragmentation.
Research Findings
California
California has been a battleground for gig economy regulation, particularly concerning the legal classification of app-based workers. The introduction of Assembly Bill 5 (AB-5) sought to reclassify gig workers as employees rather than independent contractors, thereby granting them access to standard employment benefits like health insurance, paid leave, and unemployment protection.
In response, gig companies launched Proposition 22, a heavily funded ballot initiative that carved out a specific exemption for app-based drivers. Passed in 2020 after a $200 million campaign (O’Connell, 2023), Prop 22 allowed these workers to retain their status as independent contractors, preserving the flexibility that platforms argued was essential to the gig model. However, it also introduced a hybrid framework offering limited social protections: drivers receive a stipend for health insurance if they work over 15 hours per week, coverage for medical expenses in case of work-related injuries, anti-discrimination safeguards, and safety training requirements (Didlake, 2020).
This compromise allowed gig workers to maintain control over their work schedules while gaining access to partial protections. Yet, critical employment benefits, including overtime pay, paid leave, and unemployment insurance, remain inaccessible under this model.
South Korea
The COVID-19 pandemic catalyzed a surge in platform work in South Korea, exposing the precarious conditions of gig workers who were largely excluded from formal social insurance systems. Recognizing the urgent need for coverage, the South Korean government—through a tripartite agreement involving the state, employers, and workers—introduced a series of legislative reforms aimed at integrating gig workers into the country’s social protection framework.
A pivotal innovation was the classification of gig workers as “labour providers”, enabling the extension of employment injury and unemployment insurance to platform workers. Central to this framework is the role of platform operators, who act as administrative agencies by reporting real-time work and income data and collecting social insurance contributions. This system leverages digital technologies for income tracking, contribution collection, and portability, even for workers engaged with multiple platforms.
Under this model, employment injury insurance covers delivery drivers, truckers, and similar gig workers. Contributions are shared between labour providers and business operators, calculated based on income from all platforms. Benefits include medical coverage and compensation for work-related injuries. Employment insurance provides unemployment and maternity benefits to eligible platform workers. While some exclusions apply (e.g., those earning below a threshold or aged above 65), this marks a significant expansion of coverage (International Labour Organization [ILO], 2024).
By mandating platform operators to handle administrative reporting and contributions, South Korea has made social protection more accessible, integrated, and scalable, especially for non-standard workers.
Policy Recommendations
India stands at a critical juncture in its transition to a digitally driven economy, where the gig and platform workforce is rapidly expanding but remains socially unprotected. While the Code on Social Security, 2020 marks the first legislative attempt to formally define “gig workers” and “platform workers” and propose their inclusion in social security schemes, its implementation remains uneven and largely aspirational. The Code provides enabling provisions for the creation of social security funds and welfare boards, but lacks clear mandates, funding mechanisms, and enforcement protocols. Moreover, its rollout depends heavily on state-level rulemaking, which has been delayed or inconsistent across the country. Drawing from global best practices, a hybrid policy approach that merges California’s flexible, benefits-linked contractor model with South Korea’s tech-enabled, statutory insurance coverage offers a pragmatic and scalable solution.
1. Institutionalize a Legal “Platform Worker” Category under the Code on Social Security, 2020
Building on the existing definitions of gig and platform workers in India’s Code on Social Security, 2020, a dedicated employment category should be codified with statutory rights that reflect the realities of platform-mediated labour - work that is digitally assigned, monitored, and remunerated through online intermediaries such as ride-hailing, food delivery, e-commerce, or service platforms. Inspired by California’s hybrid model under Proposition 22, this classification would preserve work flexibility while mandating essential protections - such as health insurance stipends, accident coverage, and grievance redressal mechanisms.
To operationalize this category meaningfully, the government should also leverage the e-Shram portal - a national database launched in 2021 to register unorganised workers across sectors - as the central registry for all platform workers. Dynamic registration, regularly updated by both workers and platforms, would enable real-time visibility into employment status and social security entitlements. However, this will require digital interoperability between platforms and government systems, as well as mechanisms to verify incomes and working hours to determine eligibility for tiered benefits. By linking this registration to contributory schemes (such as employee state insurance, where workers and/or employers contribute premiums) and non-contributory schemes (such as Ayushman Bharat or welfare pensions, which are tax-funded), the government can ensure targeted delivery of protections without eroding labour market flexibility.
2. Adopt a Tiered, Co-Contributory Social Insurance Scheme
Building on Korea’s contribution-sharing model, India should roll out a graduated contribution-based insurance scheme for platform workers. Contributions should be equitably shared between workers, aggregators (as defined under the Social Security Code), and the government, with income-sensitive rates to include low-earning workers. This can cover employment injury, unemployment support, and maternity benefits, ensuring financial resilience without overburdening any single actor.
To operationalize income sensitivity fairly, the system must rely on platform-reported earnings data, cross-verified through digital platforms like the e-Shram portal. Given the precarious socio-economic status of many gig workers, expecting individuals to challenge underreporting or malpractice may be unrealistic. Instead, the process should be safeguarded through independent oversight mechanisms, with active participation from civil society organizations, worker unions, and local welfare boards. These actors can act as intermediaries - monitoring compliance, flagging discrepancies, and supporting workers in accessing entitlements.
3. Enforce Statutory Obligations for Platform Aggregators
India should require platform companies to act as facilitators and fiduciaries for social protection. Amendments to the Social Security Code or rules under it can mandate aggregators to report worker data, ensure contributions are made, and provide baseline protections such as safety training, anti-harassment protocols, and subsidized insurance premiums. This balances entrepreneurial freedom with corporate accountability.
This enforcement model parallels India’s evolving approach to regulating digital intermediaries like social media platforms, where firms are compelled to comply with due diligence, grievance redressal, and data-sharing norms. While gig platforms may not wield the same transnational scale or content-related risks as tech giants, the challenges of platform opacity, algorithmic control, and fragmented worker representation are comparable. As seen in the tech sector, delayed compliance or resistance from powerful intermediaries can severely dilute policy objectives.
Proactively embedding enforceable obligations into the gig economy ecosystem is therefore essential. This would strike a careful balance between entrepreneurial flexibility and corporate accountability, ensuring that platforms contribute fairly to the social protection architecture they increasingly mediate.
4. Establish a National Gig and Platform Workers’ Welfare Board
While the Code on Social Security, 2020, envisions the creation of national and state-level Social Security Boards, the establishment of a dedicated tripartite Gig and Platform Workers’ Welfare Board is essential. This body should be tasked with formulating minimum protection standards, coordinating inter-state efforts, monitoring implementation, and resolving worker grievances. Functioning as a dynamic policy and oversight entity, it can facilitate public-private collaboration to ensure that India’s social protection framework keeps pace with the evolving platform economy.
However, rather than a centralized national board that may face constitutional and political roadblocks, given that both labour and health are subjects of concurrent and state jurisdiction, precedents from other sectors demonstrate that such a model remains feasible. Bodies like the National Health Authority (NHA) for Ayushman Bharat, the Employees’ State Insurance Corporation (ESIC), and the National Council for Vocational Education and Training (NCVET) have successfully operated through cooperative federalism. These institutions provide standard-setting and policy direction while allowing states flexibility in implementation.
A similar multi-tiered governance approach should be adopted for gig worker welfare. This would include a federal-level coordinating body with representation from state governments, platform companies, and worker unions, complemented by empowered state-level boards that design and administer welfare schemes.
India can draw from the operational frameworks of Karnataka and Rajasthan, which have taken state-level legislative steps to safeguard gig workers. Rajasthan’s Platform-Based Gig Workers (Registration and Welfare) Act, 2023 is the first of its kind to be enacted. It mandates a unique registration ID for each worker, access to health, accident, and welfare benefits, and the establishment of a tripartite Welfare Board with representation from the state, aggregators, and gig workers. The Act also introduces a Platform-Based Gig Workers’ Fund, financed through aggregator-paid welfare fees, with enforcement provisions that impose strict penalties for non-compliance, including interest charges and fines up to ₹50 lakh for repeated violations.
Karnataka’s Gig Workers’ Bill proposes the creation of a dedicated welfare fund, financed through a 1%–5% welfare fee levied on each transaction between aggregators and workers. The bill mandates that platforms register their workers, submit worker databases to a newly constituted Welfare Board, and comply with obligations such as fee collection and scheme implementation. These models reflect both the potential and the challenge of decentralised governance - many state welfare boards remain underfunded or inactive. Such a model would allow for a coordinated yet context-sensitive architecture, ensuring protections are harmonized across states without undermining state autonomy.
5. Encourage Platform-Led Innovation in Worker Welfare
To foster a culture of proactive responsibility, platforms should be incentivized to innovate beyond statutory compliance by offering voluntary benefits such as health coverage, upskilling programs, mental health support, and financial literacy training. Drawing inspiration from California’s Proposition 22, which prompted platforms to contribute to safety nets, India can adopt fiscal incentives such as tax rebates, CSR credit recognition, or co-funded public-private welfare schemes. This would not only enhance worker well-being but also promote a competitive ecosystem where worker-centricity becomes a hallmark of responsible digital enterprises.
Conclusion
As India’s gig economy continues to expand, the proportion of workers who depend on platform-based work as their primary source of income is set to rise. This inflection point presents a timely and strategic opportunity to build safeguards before protection gaps become entrenched and lead to long-term socioeconomic vulnerabilities.
Global experiences, from South Korea’s digitized, income-based insurance models to California’s hybrid of flexibility and conditional benefits, highlight that there is no one-size-fits-all solution. Each approach is rooted in its national context, but common threads such as mandatory registration, shared financial responsibility, and digital integration emerge as foundational. For India, a hybrid system that mandates platform registration, ensures aggregator contributions, and incorporates targeted government co-funding offers the most viable path forward.
Yet, India’s success will hinge not just on policy design but also on implementation. The Code on Social Security, 2020 ,while progressive in intent, has seen limited uptake, primarily because its operationalization depends on state-level legislation. By learning from international best practices while adapting them to India’s federal structure, healthcare financing landscape, and digital capacity, the country can design a sustainable and inclusive model. Doing so will not only protect its growing gig workforce but also shape a forward-looking social protection architecture suited to the realities of 21st-century labour markets.
References
Didlake, R. (2020). The gig economy’s battleground–California proposition 22.
International Labour Organization. (2024). The Republic of Korea: Extending social insurance to digital platform workers (Policy brief). https://doi.org/10.54394/WMSX3042
International Labour Organization.(2024). Expansion of the gig economy in India and opportunities for employers and business members organizations.
Malik, A. G. (2016). Worker classification and the gig-economy. Rutgers University Law Review, 69, 1729. https://rutgerslawreview.com/wp-content/uploads/2018/09/Worker-Classification-and-the-Gig-Economy.pdf
NITI Aayog. (2022). India’s Booming Gig and Platform Economy: Perspectives and Recommendations on the Future of Work. June, 2022.
OConnell, E. (2023). A wolf in sheep's clothing: Prop 22 and the exploitation of Californian workers. U. Pac. L. Rev., 54, 82.
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