Temporary workers, as per ILO definition, are those who are hired by employers for specific time periods. Temporary workers may be casual and seasonal labourers, project- or task-based workers, day labourers and fixed-term employees.
In India, the demand for temporary workers is growing. For employers, temporary employment is highly beneficial as workers are often hired for specified durations to quickly fill talent shortages. For instance, the demand for seasonal workers is especially high during festive and holiday seasons to meet the increasing economic and sales activity. IT companies tend to hire more project-based and task-based workers during large inflows of work.
Employers aren’t mandated by law to provide social security, workplace entitlements or other benefits to temporary workers. Further, employers can increase or decrease the number of workers to rein in costs. They aren’t typically bound by laws or contracts when it comes to hiring and firing temporary workers.
Despite all the benefits for employers, temporary workers are underpaid, overworked and often live with a sense of insecurity and instability. Through the provision of social security, their plight can be improved significantly. Here’s how.
Ways in Which Temporary Workers Benefit from Having Social Security Benefits
Timely Access to Proper Healthcare
One of the key challenges faced by temporary workers is the lack of comprehensive healthcare benefits and medical insurance. The implications –
- They will have to spend out-of-pocket in case of sickness, maternity, hospitalization or disability. They may not be able to afford good healthcare owing to the expenses.
- Further, getting treated without insurance may also mean waiting long durations at the hospital/ clinic, resulting in a loss of pay. To avoid these out-of-pocket expenses and loss of pay, temporary workers often choose to get some OTC medication and go to work, neglecting their own health.
- If they or a family member falls seriously ill and needs hospitalization, tests or imaging, they will have to borrow money from moneylenders or take an advance from the employer. If they are unable to raise the necessary funds or access the right specialist, they may not be able to get treated properly in a timely manner.
When they have comprehensive healthcare benefits as provided under the Employee State Insurance (ESI) scheme, temporary workers get timely access to proper preventive and curative medical care. The temporary workers and their dependents can avail cash-free access, without an upper limit on expenditure to out-patient consultations, hospitalization, imaging, testing, medicines, immunization, etc at ESIC hospital/ dispensary. They are also covered with maternity benefits, disability allowance and much more.
Social security benefits, thus, improve the health and well-being of temporary workers and their families.
Better Equipped for Involuntary Loss of Income
The risk of involuntary loss of income is quite high for temporary workers. Since they aren’t protected by contracts or legislations, they are hired and fired at will by the employer. For instance, companies across sectors reduced the number of temporary workers to rein in costs when the global pandemic hit in 2020.
The risks of occupational disease, accidents and injuries are high for certain categories of temporary workers like casual labourers, construction workers, salespersons, drivers and so on. For instance, platforms and e-commerce companies tend to hire lots of temporary workers during festive and holiday seasons to meet the higher inflow of orders and deliveries. With long hours and heavy physical labour, they face higher risks of injuries and accidents. This could lead to temporary or permanent disablement, which causes an involuntary loss of income.
Temporary workers are worst affected during force majeure events and natural disasters. We saw this happen during the pandemic when lakhs of temporary workers were left without enough resources for sustenance.
When temporary workers are covered with social security benefits, they will have access to insurance, disability benefits and so on. So, they will be better equipped to handle an involuntary loss of income.
Reliable Source of Retirement Income
Often, temporary workers don’t have access to any retirement income or pensions. They don’t have any savings either. This means temporary workers will be forced to work as they age and even when their physical health doesn’t permit it to make ends meet.
When provided with retirement benefits, temporary workers will have a constant, reliable source of income as they age. They can ensure that their quality of life doesn’t reduce and that they don’t fall into poverty in their old age.
Boosts Savings
Social security benefits such as healthcare benefits, maternity benefits, etc. reduces the out-of-pocket expenses of temporary workers. They will also have access to term insurance and gratuity. Overall, temporary workers can save more when provided with social security.
These savings offer them a much-needed safety net to meet contingencies, personal emergencies, natural disasters and other socio-economic eventualities.
Improved Productivity and Lower Absenteeism of Workers
Firstly, temporary workers and most informal workers have low levels of affinity towards their employers. This is mainly because of the short-term, temporary nature of their employment. When provided with social security, temporary workers feel more valued and cared for, improving their trust and loyalty towards the employer. This improves their levels of engagement and productivity by 20% and reduces absenteeism by 43%.
Provides Sense of Economic, Sociological and Psychological Security
The top causes of worry for temporary workers include:
- Sickness and poor health of a family member
- Impending major expense such as children’s education or wedding
- Childcare issues
- Interest payments and loan repayments, etc.
With social security benefits taking care of some of these expenses, temporary workers gain a sense of socio-economic and psychological security.
Maintain Quality of Life
Social security offers guaranteed incremental benefits to workers. Whether it is economic risks such as inflation, market fluctuation, economic downturn, etc. or a socio-economic eventuality like a pandemic or contingency, temporary workers can maintain their standard of living and quality of life when they have access to social security benefits.
Temporary workers can also improve their quality of life with social security. Using their savings, they can skill themselves or a family member, move to better housing facilities, make the much-needed home repairs or educate their children for a better future.
The Way Forward
Given all these benefits, every employer should consider paying social security benefits to temporary workers even when they aren’t mandated to. It will significantly improve the quality of life of temporary workers and their families and protect them against the many risks facing them. TankhaPay app enables employers to seamlessly pay and manage salaries and social security benefits of temporary workers.
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