Operating a digital platform in India just got a lot more “real.” With the Code on Social Security, 2020 now in force, aggregators are no longer just tech intermediaries, they are legally accountable entities.
The shift is massive: you are now responsible for the social welfare of a workforce that doesn’t even sit in your office. As a Senior Labour Law Consultant, I see many founders losing sleep over the “1-2% turnover” rule. Let’s break down these challenges and how to solve them with a Helpful Peer approach.
Challenge 1: The “Turnover vs. Payout” Math
- The Problem: Aggregators must contribute 1% to 2% of annual turnover to the Social Security Fund, capped at 5% of total payouts to gig workers.
- The Confusion: If your platform also sells hardware or software, how do you isolate gig-related turnover? Manual calculations invite audit risk.
The Solution:
- Segmented Accounting: Create a dedicated ledger for Platform-Generated Revenue.
- Automated Contribution Engines: Integrate your payout API with a compliance-ready HRMS that auto-calculates the levy. Avoid Excel; real-time automation prevents both overpayment and underfunding.
Challenge 2: The Data Integrity Gap (UAN & e-Shram)
- The Problem: You must facilitate registration of every worker on the e-Shram portal, seeded with Aadhaar. Each worker needs a Universal Account Number (UAN) for benefit portability.
- The Reality: Gig work churn is high. Workers join on Monday and vanish by Friday. Syncing your internal database with the National Database for Unorganised Workers (NDUW) is complex.
The Solution:
- Onboarding Integration: Make e-Shram registration a mandatory field in your “Join the Platform” flow.
- The 90-Day Filter: Use dashboards to flag workers who cross the 90-day engagement threshold. This narrows your statutory reporting to eligible workers, reducing admin load.
Challenge 3: Principal Employer Liability
- The Problem: If your staffing vendor fails to pay wages or social security contributions, you (the Principal Employer) are liable. This includes EPF, ESI, and other dues.
The Solution:
- Vendor Compliance Dashboards: Require vendors to upload Proof of Contribution (EPF/ESI receipts) before invoice release.
- Trust-But-Verify: Conduct quarterly Spot Audits to ensure vendors aren’t using “ghost workers” to skim from your social security obligations.
Challenge 4: Grievance Redressal & Transparency
- The Problem: You must disclose how your automated systems (algorithms) affect worker earnings and conditions. A formal Grievance Redressal Committee is now mandatory.
The Solution:
- Algorithm Transparency Report: Publish a simple, jargon-free PDF in your app’s Help section explaining how surges, ratings, and distances affect payouts.
- Toll-Free Helpline: Set up a 24/7 grievance channel. Resolving issues internally within 14 days is far cheaper than facing a government facilitation centre.
Disclaimer: This content is provided for educational and informational purposes only and does not constitute legal advice. While it covers the key compliance pillars of the Code on Social Security, 2020 as of early 2026, aggregators should seek specific legal counsel to navigate state-specific variations and evolving draft rules.