The Coming Disruption In India's Job Market

The new Labour and Social Security codes will fundamentally alter the nature of employment

- R Srinivasan

ON THE OTHER HAND

There is a difference between growth and size. India continues to be one of the fastest growing countries in the world, but it has some way to go before its economy catches up in sheer size with the biggies. Take California, for instance. The state is one of the largest in the US, but is eight times smaller than India in land area and has just 3 per cent of India’s population. Its GDP, however, at a little over $3 trillion, is actually bigger than India’s GDP of around $2.96 trillion.

But there is one area where India is playing catch-up with California. Surprisingly, it is not technology — where hundreds of thousands of clever, highly-skilled Indian Americans have helped California’s ‘Silicon Valley’ become the unquestioned technology capital of the world — but in the area of labour.

Labour laws, to be precise. Last month, California Governor Gavin Newsom signed Assembly Bill 5 into law, which will force companies like Uber and Lyft to reclassify their gig workers as employees, and extend benefits of labour protection like minimum wages, overtime and social security cover. The law redefines who can be classified as a contract worker. From January 1, 2020, Uber’s army of drivers can no longer be considered independent contractors, since the job they do — driving vehicles for hire — falls within the “normal course” of Uber’s business.