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Business Standard
4 days ago
- Business
- Business Standard
Parliamentary panel urges govt to revise wage ceiling under ESI scheme
In a bid to increase the coverage of the Employees' State Insurance (ESI) scheme, the Parliamentary Standing Committee on Labour has urged the Ministry of Labour and Employment to revise the wage ceiling and exemption limit under the scheme. 'The committee stress the urgency for an upward revision of the wage ceiling and exemption limit under the ESI scheme, and urge the ministry to examine the report at the earliest so that the ceiling and limit are enhanced accordingly with a view to substantially increase coverage and provide benefits to the maximum number of insured persons (IPs) and beneficiaries,' the report stated. At present, employees of factories and establishments employing 10 or more persons, and notified under the Employees' State Insurance Corporation (ESIC) Act, drawing wages up to ₹21,000 per month (₹25,000 for persons with disabilities), are covered under the scheme. This ceiling has been in place since 2017. Under the scheme, employees and employers contribute 0.75 per cent and 3.25 per cent of wages, respectively. The proceeds are utilised to provide medical care and various cash benefits to insured persons. Employees with daily wages up to ₹176 are exempted from payment of their contribution. This exemption was made effective in September 2019. 'The report of the committee has been received recently and the issue is under examination,' it had submitted. However, the standing committee noted that no specific decision has been taken by the Ministry or ESIC on the committee's recommendations. In addition, the panel expressed deep concern that only a third—12.6 million—of the total insured persons had their Aadhaar seeded by September last year. 'Since the provision of formulating a special scheme for unorganised/gig and platform workers has been included in the new labour codes, the seeding process has to be expedited on a war footing, thus paving the way for guaranteed success in preparing the groundwork before the Social Security Code actually comes into effect,' the report noted. The committee also emphasised the need to enrol doctors in areas where ESIC does not have a presence. It urged the Ministry and ESIC to implement enhanced remuneration for Insurance Medical Practitioners (IMPs), as the current capitation fee of ₹41 per IP per month is meagre and needs revision. To supplement its dispensary network, ESIC has enrolled 1,003 private medical practitioners as IMPs. Each IMP is permitted to register up to 2,000 IP family units to provide medical care, including consultation, basic laboratory investigations, and the cost of medicines.
The Hindu
03-08-2025
- Business
- The Hindu
A step forward, but not far enough
While the Karnataka Platform Based Gig Workers (Social Security and Welfare) Ordinance, 2025, is a step forward towards basic social security cover, there are serious lacunae related to calculation of the welfare cess. The welfare ordinance specifies 'payout' as the basis parameter for calculation of the welfare cess. 'Payout' is defined as the 'final payment made by the aggregator/platform to the gig worker…'. It goes on to define the 'welfare fee' as ranging from 1% and 5% of the payout per transaction to the gig worker. This formulation raises a series of issues. First, the range of 1-5% is likely to tend towards the lower bound of 1%. For instance, while the Construction Workers Welfare Cess provided for 1-2% cess, across States, the actual cess collected was 1% of construction cost. Also Read | Karnataka Gig Workers Bill: What stayed and what changed Second, at the lower bound, this is a clear dilution of the provisions of cess under the Social Security Code of the Centre. The Code defines cess as 1-2% of turnover with a maximum cap of 5% of payment to workers. That means that a cess of 1% on turnover is the minimum. The 'payout', as defined in the Karnataka Bill, being the payment from the platform to the gig worker, is a part of and therefore less than the turnover of the platform. A cess of 1% on payout is therefore necessarily less than 1% cess on turnover of the platform and contravenes the Social Security Code. We could test this rate of cess against the financial results of Zomato. The company had an Adjusted Revenue of ₹7,790 crore, while the 'delivery and related charges' was ₹3,900 crore (Annual Report 2024). Therefore, even a 2% cess on payout would barely equal 1% of company turnover, the minimum provision for platform cess under the Code. Also Read | Domestic workers demand recognition, call for law similar to that of gig workers The trend among food delivery platforms is towards diversification into merchandising and own production. There is every possibility that in such situations, the payout as a ratio to turnover might decline further, with even the cess rate at 2% payout being less than 1% cess on turnover. From Zomato's example, we can calculate that at 5% cess on the payout, the additional cost to be borne by the customer on a purchase value of ₹100 is barely around 50 paise. Surely the customer would not grudge this additional cost for social security cover to the platform worker. The employer contribution from Zomato at this cess rate would still be less than a third of what garment manufacturers in the State contribute towards Employees' State Insurance and Employees' Provident Fund cover per worker. There is a further issue related to the ride-hail sector of platform work. With the entry of Namma Yatri in Bengaluru, the operations for the sector for autorickshaws has moved from a 'commission' model to a 'subscription' model. In essence, Namma Yatri does not charge a commission on its rides, passing on the entire payment by customers to the driver. Instead, the driver pays a fixed subscription to Namma Yatri that allows her/him to be onboarded with the platform for a fixed duration. This benefits the driver, as the per ride subscription cost generally works out much less than the per ride commission. Uber and Ola have followed this model introduced by Namma Yatri, for autorickshaw operations in Bengaluru. The payout in this model from the platform to the driver is zero. How will the Bill account for this? Will this mean that platform-based autorickshaw drivers will be excluded from it? EXPLAINED | What does the Karnataka Bill promise gig workers? A possible workaround could be that for all platform operations following a subscription model, the cess payment could be built into the customer fee, charging, say, 2% of the full transaction amount. The financial portal for this model of platform work could be designed to transfer the cess amount of each transaction to the Payment and Welfare Fee Verification System that forms part of the Bill. The quantum of payment at 2% is not so much as to inconvenience the customers taking a ride on these autorickshaws. The platforms in this case are unlikely to object, as they are merely called on to serve as intermediaries for the cess transaction. The platform sector is complex and a one-size-fits-all approach will only end in chaos. Cess rates will need to be calibrated to fit the average employment conditions in each sector, ensuring that some minimum standards of social security can be guaranteed. Mohan Mani, Visiting Fellow, National Law School of India University, Bengaluru
New Indian Express
13-07-2025
- Automotive
- New Indian Express
Union minister Shobha launches training for women, transpeople
BENGALURU: Union Minister of State for MSME and Labour and Employment Shobha Karandlaje on Saturday launched a free auto-driving training programme for women and transgender individuals in Bengaluru. The initiative, jointly run by Bangalore Political Action Committee ( and CGI under its CSR programme, aims to empower over 100 individuals through skill development, financial literacy, and dignified livelihood support. The minister also announced the Centre's plans to extend social security benefits to workers in the unorganised sector, which comprises nearly 90 per cent of India's workforce. 'We are working to consolidate 29 labour laws into four codes, including the Social Security Code, to ensure economic and social protection for informal workers in sectors like agriculture, construction, and quick commerce,' Karandlaje said. The training programme includes a 60-day module covering driving skills, life skills, road safety, and financial education. It also facilitates driving licence acquisition, rental and fuel support, and access to auto-rickshaws through partnerships with financial institutions. 'This initiative reflects the government's vision of Nari Shakti and inclusive growth. Empowering women and transgender persons through skill development is critical to ensuring their economic independence,' Karandlaje added. The launch event was attended Srividya Natraj and Sarika Pradhan, Vice Presidents at CGI and many more. 'This is about transforming lives through mobility, while making Bengaluru's transport more gender-sensitive and accessible,' said Srividya.
Indian Express
08-07-2025
- Business
- Indian Express
Bharat Bandh: Why Centre must listen to the concerns of trade unions
India is likely to witness one of the largest nationwide strikes tomorrow, with multiple Central Trade Unions calling for a Bharat Bandh against the new labour codes, besides expressing concerns over many issues like privatisation. Historically, labour rights have been regulated by a flurry of over 20 Central and State laws, covering distinct aspects of the rights and obligations of workers. For the last five years, the Centre has been consolidating all these laws into codes, which are expected to come into force this year. The trade unions opposed this code even in the past, deeming it pro-corporate and a tool to curtail workers' solidarity and the collective right to agitate for their rights. Tomorrow's bandh is the culmination of a long-drawn-out resistance by the trade unions, including the INTUC, AITUC, CITU, HMS and SEWA among others. It is anticipated that over 25 crore workers will participate in it. Many farmers' unions have also come out in support of tomorrow's Bharat Bandh. The Labour Codes largely streamline the different central laws on labour into four distinct thematic areas: Wages, workplace safety, terms of employment and dispute resolution, and social security. While the intent to concatenate all the relevant laws has received support, their legislative reengineering has stirred a fair amount of controversy. The Code on Wages (2019), which mandates a minimum wage threshold and timely payouts across sectors, lays down a unified definition of 'wages' to level the calculations on employee benefits like gratuity, pensions, etc. It also sets out specific conditions for overtime and allowances as wage components. The Industrial Relations Code (2020) governs rules around trade unions, employee layoffs, minimum work hours and dispute resolution mechanisms. This legislation specifically introduces a category called 'fixed-term employee', who is an employee that will get the benefits that permanent employees are entitled to. It also raises the minimum limit from 100 to 300 workers for a company to seek compulsory government approvals in the case of layoffs or closure. The Social Security Code (2020) determines the terms and conditions as well as the extent of different central and state-level welfare schemes for workers. This law extends its purview to cover gig workers, platform-based workers and domestic workers. It also mandates the statutory contribution of all platform owners or aggregators to 2 per cent of their annual profits towards the welfare fund of the workers. The Occupational Safety, Health and Working Conditions Code (2020) looks into the existing safety gaps and introduces measures to bridge them, like mandatory appointment letters, health checks for hazardous jobs, digitised attendance records, and safety measures for female workers, especially during night shifts. The labour unions have been protesting against many aspects of these Codes. First, they have expressed their concerns over the 'fixed-term employment' concept that would allegedly deprive workers of any job security. The obligation of digitised registration of identity documents like Aadhaar to receive welfare benefits has also been questioned. There is also outrage against the change in the retrenchment limits for layoffs, which further makes workers vulnerable. Moreover, the increased compliance requirements for union registrations have been deemed a step to undermine the power of collective bargaining of the workers. The current call for Bharat Bandh stems from the government's unwillingness to respond to the unions' demands for reform in the proposed laws. Even their 17-point demand charter, which was submitted by the unions to the Labour Ministry earlier this year, has been ignored. The demands encompassed regularising schemes for all workers, irrespective of their nature of employment; revisiting clauses related to union registrations and reinstating their constitutional right to unionise, strike and negotiate; increasing the minimum wage to index it to inflation; capping working hours to eight hours a day; and overall, strengthening the implementation of measures that safeguard the rights of workers. The Bharat Bandh organisers highlight that the Indian Labour Conference has not been organised over the past decade, and the existing labour laws landscape is increasingly promoting privatisation without adequately tackling unemployment and related problems. The projected scale of the Bharat Bandh tomorrow reflects the persisting outrage of the workers' unions. The government needs to listen to the workers, or else, it might be difficult to reconcile with them in the coming future. The writer is outreach lead at Nyaaya, an initiative of Vidhi Centre for Legal Policy
United News of India
08-07-2025
- Politics
- United News of India
National strike unnecessary, politically motivated, says FETO
Thiruvananthapuram, July 8 (UNI) Terming it politically motivated and unnecessary, the Federation of Employees and Teachers Organisations (FETO) has urged employees to reject the strike announced by left-leaning service organisations in Kerala in support of the national strike called by a few trade unions on July 9. "The primary demand of the strike is the withdrawal of the four new labour codes. However, the modernisation of outdated labour laws is a longstanding and common demand of the working class," FETO Kerala General Secretary J. Mahadevan said today. "The Wage Code and the Social Security Code, in particular, are historically significant and highly beneficial to workers. Despite 44 labour laws being consolidated into four codes, the trade unions calling for the strike have not clearly stated which specific provision they oppose," the FETO leader pointed out. Before these codes were passed in Parliament, the Union Labour Ministry held several rounds of discussions with trade unions and employer organisations at the national, state, and sectoral levels, he clarified. The FETO state committee noted that the current strike is merely a continuation of an annual ritualistic protest lacking genuine purpose, he said. When it comes to government employees, the central government has been providing dearness allowance and implementing pay revisions consistently, he added. "In contrast, the Left government in Kerala, which came to power promising to withdraw the contributory pension scheme, has not fulfilled that promise. Moreover, it has withheld several entitlements such as dearness allowance, leave surrender, and other benefits," he charged. "The pay revision that was due to be implemented from July 1, 2014, has been delayed by over a year. If the left-aligned service organisations in Kerala are sincere, they should be protesting against the denial of these benefits by the Left government," he said. FETO also demanded that the administration and the police ensure the safety and travel facilities of employees who choose to reject the strike and report for duty. This was stated in a joint press release by FETO State President A.J. Srini, General Secretary J. Mahadevan, and State Treasurer C.K. Jayaprasad. UNI DS ARN
