• Consumers hit by digital companies?


• Zomato-Swiggy to consider raising ‘platform fees’


• This is the big reason

New Labor Code India: The Labor Code, which has been pending in India for many years, has finally come into effect from November 21. The biggest impact of these new regulations will be on gig economy platforms, such as Swiggy (Swiggy) and Zomato (Zomato), will be. According to a report by brokerage firm Kotak Institutional Equities, these companies may now have to contribute 1-2% of their annual turnover to the government’s Social Security Scheme.

Additional charge of ₹3.2 on delivery orders

The contribution limit has been fixed at 5% of the gross wages paid to gig workers. If this 5% cap is implemented, companies will have an additional financial burden of around ₹3.2 per food delivery order and around ₹2.4 per quick commerce order, Kotak estimates. This additional cost will ultimately be passed on to the consumer. That is, the platform fee may increase in the future or companies may charge new fees. The platforms are already offering benefits like accident insurance, health insurance and maternity benefit. If the government decides to provide all these benefits through central funds, the additional cost can come down to around ₹1 to ₹2 per order.

Wage code will increase wage costs?

According to the new Wage Code, the Central Government will now fix a National Floor Wage i.e. minimum wage for the entire country. No state can fix wages below this minimum wage. The government has not yet clarified whether the rule will apply to gig workers such as delivery partners. But, if the state governments adopt and implement this new minimum wage, the overall wage cost of the corporate sector will increase. Because companies will have to pay both employees and contract staff according to this new wage level.

A major challenge in implementation

Expanding the coverage of social security is certainly a great reform, but it is not easy to implement. Gig workers don’t work fixed shifts, they often switch platforms and are sometimes active on two or three apps at once. In such a situation, it will be a big challenge for both the government and the companies to decide which worker is entitled to how much contribution from which platform. This is why e-Shram Database is very important. Because this data will further determine which workers will receive benefits, when and how.

Opportunities for staffing companies

According to Kotak, organized staffing companies like TeamLease can benefit from these labor codes in the long run. The new codes make compliance clearer and easier. This allows companies to shift to more formal staffing platforms instead of un-organized recruitment.