INTRODUCTION:

The COVID-19 pandemic has provided the understanding that universal social security is essential for working class people. Law, policy innovation and an integrated approach are needed to protect workers’ rights and provide protection and security to the unorganised sector. This article reviews the social security status of unorganised workers in India, key challenges, major schemes, and future prospects.

As per the Constitution of India labour matters are listed in concurrent list, allowing both central and state legislatures to enact relevant laws. Before the new Labour Codes, more than 60 central and state laws governed labour issues for all workers.

The Government of India has codified existing labour laws into four new labour codes. The labour force is divided into organised and unorganised sectors, with the main difference being the level of legal protection and union representation. The organised sector gets strong legal safeguards and active unions, while the unorganised sector lacks these protections. The only similarity between these two sectors is that both sectors are labour intensive. In 2011-12, India had 483 million workers, up from 469 million in 2004-05. The informal sector made up 91.9% of employment in 2011-12, indicating that over 93% of labour is working in the unorganised sector.

Another characteristic of workplaces within India is the high number of women workers in the unorganised sector. Despite various labour laws, the main challenge is protecting workers’ rights and preventing exploitation. Inconsistent implementation of labour laws and violation of labour rights by authorities and contractors raise concerns about constitutional democracy and the rule of law. When attacked and violated, workers are seeking redress from institutions. Given the size of the unorganised workforce, it is crucial to assess this sector and the effectiveness of the interventions.

Strengthening of Social Scheme and Social Security post 1990s:

After the implementation of new economic reform under Prime Minister Narasimha Rao leadership, the central government have launched the National Social Assistance Programme as Social security scheme. This programme was effective from August 15, 1995, included the national maternity benefit scheme, national family benefit scheme and national old age pension scheme. All the above-mentioned schemes aimed to provide facilities to households who belong to below poverty line and social security benefit to the elderly and maternity support, respectively.

The National Social Assistance Programme acknowledges the responsibility of central government and State governments to take major steps towards fulfilling the objective of Directive Principles of State Policy article 41 and 42 of the Constitution. The Constitution of India article 41 mandates State to offer some assistance to its citizens in case of unemployment, illness, disability and old age in other cases of unjustified needs within the limit of its economic condition.

In 2002, Prime Minister Atal Bihari Vajpayee inaugurated a seminar titled "Evolving a National Policy on Social Security," organized to commemorate the Golden Jubilee of the Employees' State Insurance Corporation (ESIC). The foundation of a dedicated institution for social security, even before the implementation of industrialization plans, reflects the foresight of early policymakers. The emphasis on social security emerged from the close relationship between the labour movement and the broader political movement during India's struggle for independence. Mahatma Gandhi established a labour organization to advocate for the legitimate interests of the working class (PIB, GoI, Feb. 2002). The National Commission on Labour (2002) submitted the report with the recommendation of comprehensive and universal social security coverage for all workers, supported by a decentralised administrative structure. Despite these recommendations, the Bill maintains schemes with different coverage schemes, applicability limitation thresholds, and a fragmented delivery system.

The Government led by Dr Manmohan Singh in September 2004 established the commission named National Commission for Enterprises in the Unorganised Sector (NCEUS). The commission was chaired by Dr Arjun Sengupta. The Commission submitted several reports, including the Report on Social Security for Unorganised Workers in May 2006. The NCEUS recommended enacting legislation to provide social security for unorganised workers. Additionally, the report on the Unorganized Sector's Conditions of Work and Promotion of Livelihood 2006-07 (NCEUS 2007) was introduced. The livelihood issues that approximately 93% of India's workforce faces were recognized as a major national issue in this publication. The reports highlighted disparities between organised and unorganised sector workers regarding minimum wages, social security benefits, and working conditions.

There are two categories of issues that workers in the unorganized/informal sector face with regard to social security. The first one results from capability deprivation or deficiency, which is linked to the widespread deprivation of the poorer segments of society and manifests itself in the form of low incomes, inadequate employment, bad health and educational status, and so forth. The second results from adversity in the sense that there are insufficient safety nets or fallback mechanisms to handle unforeseen circumstances like illness, accidents, old age, and death. The fact that most workers from underprivileged groups are employed in the unorganized or informal sector lends these individuals' traits a certain social dimension. In who regard, social security should also be a measure.

Unorganised Workers and Social Security in India

First National Commission on Labour chaired by Justice Gajendragadkar. In this report unorganized sector was defined, as a segment of the workforce "that has not been able to organize in pursuit of a common objective because of constraints such as (a) casual nature of employment, (b) ignorance and illiteracy, (c) small establishments with low capital investment per person employed, (d) scattered nature of establishments, and (e) superior strength of the employer operating singly or in combination.” The Commission gave ‘illustrative’ range of unorganised labour: ‘These are: (i) contract labour including construction workers; (ii) casual labour; (iii) labour employed in small scale industry; (iv) handloom/ power-loom workers; (v) beedi and cigar workers (vi) employees in shops and commercial establishments; (vii) sweepers and scavengers; (viii) workers in tanneries; (ix) tribal labour; and (x) ‘other unprotected labour’ (First NLC, p.417).

NCEUS and many other scholars advocating a broader policy framework, the (Dreze and Sen, 1989; Dev 2001; Kannan, 2010) suggested a three-tier approach to social security in India. First and foremost is the need for universal programme/s for human development that must address the ‘creation and enhancement of human capabilities by offering entitlements to all citizens funded by the public exchequer’. The second level should prioritize what they referred to as “promoting social security measures”, which include essential social security benefits for all impoverished individual, such as food, health care, and education. Third position goes to a combination of these two categories supported by data on poverty and insecurity. The largest social security programme in India is the launched NREGA 2005 right based legislative support. However, there are several more programmes operating in the first category.

At the second level, importance should be given to what they called the basic social security measures (food, health, education, etc.) to all the poor citizens - referred a ‘promotional social security measures’. At the third place is a combination of these two types backed by empirical evidence on the poverty and insecurity. In the Indian context, one can listed a number of social security schemes that are in operation in first category, though the recently initiated scheme (NREGA 2005) with rights based statutory backing is the biggest one (Reddy, 2013).

In India, the phrase "unorganised sector" is typically used to refer to the unorganized sector, while "unorganised workers" are the term used to describe informal workers. As a result, the Commission has decided to use the following definition: “All unincorporated private enterprises owned by individuals or households engaged in the production and sale of goods and services and operated on a proprietary or a partnership basis and employing less than 10 persons”.

Therefore, the following definition of unorganized employment has been established by the Commission for the purposes of this Report: “Unorganised Workers are all those who are working in the Unorganised Sector defined earlier and the workers in the formal sector without any employment security and social security provided by the employer”.

From Unorganized Workers’ Social Security Act 2008 to Social Security Code 2020:

Generally, labour laws are subject to criticism. It is generally believed that the provisions of these laws are cumbersome and take a lot of time and expense to implement. Labour in the unorganised sector is forced to work in poor conditions and are often paid less than the prescribed minimum wage. In view of these problems of the unorganized sector, the government for the first time provided legal protection to the workers working in this sector by passing the Unorganized Workers Social Security Act 2008 in Parliament in 2008.

According to the Unorganized Workers' Social Security Act of 2008, the social security package would consist of ten schemes listed in Schedule 1. These include the national Family benefit scheme, janani suraksha yojana, janshree bima yojana, aam admi bima yojana, rashtriya swasthya bima yojana, national old age pension scheme, national family benefit scheme, and pension to master craft persons, handloom craft artisans’ comprehensive welfare scheme and handloom craft artisans’ comprehensive welfare scheme.

Additionally, the Unorganised Workers’ Social Security Act (UWSS), 2008, was created by the Indian government and includes provisions for, creating welfare programs for the unorganised sector on issue pertaining to; Maternity and Health benefits, Life protection, Disability protection, old age protection and; Any other additional benefit decided by the Central Government. In order to protect unorganized sector workers against old age, the Pradhan Mantri Shram Yogi Maan-dhan (PM-SYM) initiative was introduced in March 2019. This pension plan is contributing and optional.

Of course, many laws have been made by the Government of India, but they are mostly in favour of formal sector. The only law made specifically for workers in the unorganized sector is the Unorganized Workers Social Security Act 2008. The act empowered the government to adopt social security measures for workers in the unorganised sector. The Ministry of Labour, Government of India, has divided four categories of unorganized workers based on the employment and their nature, occupation, particularly in the victim categories and service categories.

1. Occupation Base: Workers who are engaged in agricultural activities like agricultural labourers, small marginal and landless farmers, share cropper, fishermen, beedi makers, labelling, packaging, animal husbandry, building and construction work, leather industry, salt production, brick kiln, saw mill workers, oil mill workers, weavers, artisans, workers associated with mines and stone mining etc.

2. Based on the Nature of Employment: e.g., Agricultural Anik Bonded Labourers, Migrant Labourers, Contract Labourers, and Casual Labourers.

3. Specially Distressed Groups: toddy tappers, drivers of cattle-driven carts carrying loads on their heads, and load and unload workers.

4. Unorganized Workers in the Service Category, such as midwives, domestic workers, women and men, fishermen, barbers, vegetable and fruit sellers, newspaper sellers, etc.

According to the National Labour Commission 1969, unorganized workers can be envisaged as persons who are unable to organize for a common purpose due to certain constraints. These include temporary nature of employment, illiteracy and ignorance, and marginal & small establishments with low capital investment per worker. Obstacles include the wide and dispersed position of the establishments and the superior position of the employers, individually or collectively.

Social Security Code 2020 and Unorganised Workers:

Furthermore, according to the 2019 Bill (later Social Security Code 2020), the government can announce initiatives for individuals in the unorganised sector (including home-based and self-employed workers), freelancers, and platform workers. Gig workers are individuals who operate outside the conventional employer-employee dynamic. Platform workers are individuals who connect with organizations or clients via online platforms to offer services or address specific issues. The 2020 legislation introduces these modifications for these employees: A social security program for independent workers, non-union labourers, and platform workers.

The 2019 Bill gave power to the central government the authority to create a social protection fund for unorganized workers, freelancers, and platform workers. According to the 2020 code, the central government is required to set up this fund. Furthermore, state governments will also be responsible for establishing and overseeing distinct welfare funds for non-union workers. The 2020 code additionally outlines the registration for three types of workers: unorganised workers, gig workers, and platform workers.

Gig and Platform Workers' National Social Security: The 2019 bill proposed to create national and state-level boards to manage programs for workers in the informal sector. Under Social Security Code 2020 recommend to setup the National Social Security Board and oversee welfare schemes for platform workers and gig workers, as well as unorganised workers. In such cases, the Board will have a different group of members, consisting of: “(i) five representatives of aggregators nominated by the Central Government, (ii) five representatives of gig workers and platform workers nominated by the Central Government, (iii) Director General of ESIC, and (iv) five representatives of State Governments.” (Social Security Code, 2020).

The function of the aggregators: The 2020 Code specifies that programs for gig workers and platform workers can be financed through the joint contributions of the central government, state governments, and aggregators. To this end, a list of aggregators is outlined in Schedule 7 of the Bill. This comprises nine categories, such as ride-sharing services, food and grocery delivery, content and media services, and e-marketplaces. The share of any such aggregator may range from 1-2% of the annual revenue of the aggregators at the rate announced by the government. Nonetheless, this contribution must not surpass 5% of the sum paid or to be paid to gig and platform workers by the aggregator.

CONCLUSION:

Now let us consider the problems that unorganized workers face in their lives - Low-paying jobs: Unfortunately, the principle of equal pay for equal work is not followed for unorganised workers, nor are they given additional incentives, allowances, bonuses or other benefits. Exploitation discrimination and injustice in the workplace has become a tacitly acceptable part of their lives. The employment of unorganized workers is temporary, irregular, casual and scattered. They are engaged in informal activities without any fixed task or obligation they suffer from disguised unemployment due to the seasonal nature of the work. Laws like Provident Fund Act, Bonus Act, Pension Act, Factories Act, and Maternity Benefit Act are not applicable to them. In fact, their employment depends on the will of the employer. They are exploited by middlemen, contractors and employers. They work in unhygienic conditions and workers or trade unions have no special association with them. They are tortured physically and psychologically. Child labour is abused and women workers are subjected to sexual harassment at the workplace. Due to illiteracy, ignorance and the remote and scattered nature of their workplace, legal protection does not reach them. Unorganised workers, deprived of basic amenities, work in overcrowded and unhygienic conditions where there is neither adequate sanitation nor water facility. They live in small cramped and poorly ventilated rooms. Their children do not get basic facilities like education, health and nutrition.

The Social Security Code 2020 has been made by the current government as part of the reform in labour laws. The objective is to amalgamate several of the earlier laws and present them in a single form so as to eliminate the multiplicity of laws and the confusion arising out of it.

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Received on 09.03.2026 Revised on 30.03.2026

Accepted on 16.04.2026 Published on 16.05.2026

Available online from May 18, 2026

Res. J. of Humanities and Social Sciences. 2026;17(2):114-118.

DOI: 10.52711/2321-5828.2026.00022

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