On Friday, the government consolidated 29 labour laws into four codes to enhance compliance by employers, modernise outdated provisions and create a simplified framework to promote ease of doing business and boost employment. The move is set to impact all gig and platform workers across delivery, logistics and warehousing, transport, services, ecommerce and more.
The labour codes are expected to have a substantial impact on consumer-facing industries, driven largely by gig and platform workers who were considered an unorganised workforce thus far.
The labour codes for the first time recognise gig and platform workers, including them under the ambit of social security. In addition, aggregators are also expected to contribute 1–2 percent of their annual turnover, capped at 5 percent of the amount paid to such workers, towards a social security fund for gig and platform workers.
“This represents a tangible financial commitment and some portion of this cost could ultimately be passed on to consumers,” said Vaibhav Bhardwaj, Partner at Khaitan & Co.
While consumer internet companies like Amazon, Zepto and Flipkart have welcomed the move, both Swiggy and Eternal (previously Zomato) have maintained in exchange filings that the current laws will not have any long-term financial impact on the businesses. However, compliance among smaller businesses working with labour on contracts remains a concern.
While the move is in the right direction, clarity is still awaited on critical rules and interpretation of the law.
“The compliance timeline (by the platforms) will ultimately depend on when both central and state rules are notified. Moreover, considering that a few states have already enacted laws relating to gig workers, it will need to be assessed how the codes will operate alongside these state-level initiatives,” said Bhardwaj of Khaitan & Co.
The government should ideally fix the amount paid out as part of social security measures including Employee State Insurance (ESI) and Provident Fund (PF) due to the disparity in payouts for different categories of gig workers, said Major Prashant Rai, chairman and managing director of Balram Corporate Services, a manpower supply company which works with recruitment of housekeeping, security guards and other contractual roles.
“It is a good step by the government, and the onus should be on the principal employer to pay the contractor within a stipulated time for timely social security deposits made every month. It is the responsibility of the principal employer and contractor to comply with the laws,” said Rai. He further added that registering workers on the eShram Portal will lead to better tracking of social security contributions by the employer.
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The precise financial impact on companies for compliance will take time to play out. Details on creating a dedicated fund as part of the law for gig and platform workers to cover life, disability, health and old-age benefits are also awaited.
“We are committed to supporting measures that further improve outcomes for gig workers and hence welcome this announcement,” said Eternal in a filing with the exchanges. The statement further added, “The exact financial and operational contours of CoSS (Code on Social Security) will become clear only once the corresponding rules are notified. We have been engaging with the government over the years and providing inputs throughout this process, and we will continue to do so. We don’t think any financial impact on account of these rules will be detrimental to the long-term health and sustainability of our business. We have been anticipating and planning for these social security-related contributions in our businesses for a while now.”
In a similar vein, Swiggy reported that, “Swiggy is strengthening its digital systems and internal processes to seamlessly integrate the new requirements into our operating model. Based on available information, we do not anticipate any material impact of CoSS on our business sustainability, cost structure, or long-term financial performance. We remain committed to supporting the government’s vision of a modern and inclusive social security net and continue to prioritise the welfare, safety, and dignity of our delivery-partner community.”
The deciding factor will be how soon the central and state governments notify the corresponding rules and the response by employees and trade unions to the new set of laws.
“Organisations will require time to update their processes and practices including employment contracts, HR policies, payroll structures and social security systems. In the initial phase, we do not anticipate aggressive enforcement for any non-compliance, particularly given the introduction of the ‘inspector-cum-facilitator’, signalling that authorities are expected to guide employers through the transition rather than immediately penalise them,” observed Bhardwaj of Khaitan & Co.
He added that bringing all stakeholders on the same page will be key in managing the transition.
First Published: Nov 24, 2025, 12:44
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