Written by 9:12 am Social Security

Insurance for Blue-Collar Workforce

Insurance for Blue-Collar Workforce

Blue collar workers are everywhere, working as farmers, casual labourers, delivery persons, electricians, plumbers, factory workers and so on. At present, the blue-collar workforce in India is estimated to be between 30-45 crores as per one estimate and around 50 crores as per another estimate. But they are a highly underappreciated and undervalued group, often outside the purview of legislation, benefits and social security. Today, more employers are extending social security benefits especially insurance for blue collar workers in a bid to attract skilled workers and retain them.

Why is insurance for blue collar workers important? What components should it include? What does the legal landscape say about blue collar worker’s social security? Keep reading to find out.

Who Are Blue Collar Workers?

Blue-collar workers are typically labourers who engage in hard manual labour and are employed in industries such as manufacturing, construction, mining, logistics and maintenance. They typically work with their hands and may use tools and machinery to perform their tasks in their job.

Blue-collar workers may be skilled or unskilled workers. So, they may not need a college degree or specialised training beyond a high school diploma or vocational training. Skilled blue-collar workers include electricians, plumbers, drivers, machine operators, etc. Unskilled blue-collar workers include construction workers, farm workers, etc.


Blue collar jobs are increasing at a rapid pace with a 39% year-on-year growth in job vacancies even as white collar workers are facing layoffs. Companies in sectors such as logistics, ecommerce, real estate, construction, healthcare, finance and manufacturing, among others are ramping up their blue-collar workforce. Why so? With the pandemic easing, their business is picking up and they need more blue-collar workers to cater to the increasing demand. For instance, e-commerce is picking up so there is a rapid rise in the demand for delivery workers, warehouse workers, drivers,

The adoption of technology and digital transformation is creating a paradigm shift in the labour market. New-age companies today rely on technology-driven infrastructures for remote hiring, online training and management of blue-collar workers such as platform workers, gig workers and temporary workers, rather than relying on traditional routes of contractors. These technology-led infrastructures are enabling unemployed youth and fresh graduates to access work opportunities.

Challenges/ Plight

Blue collar workers in India face a number of challenges related to working conditions, wages, and social status.

The major challenge faced by blue collar workers is the meagre wages, paid daily, weekly or monthly, which is not adequate to meet even their basic expenses, leave alone save or meet emergencies. This is especially true for migrant workers who relocate to distant places to find work and are paid even less than local workers.

Yet another challenge facing blue collar workers in India is the lack of social security benefits. Many workers are not covered by any kind of social security system, which means that they have no protection against the risk of work accidents, illness, infections, occupational disease or job loss. This can leave them vulnerable to exploitation and can make it difficult for them to save for the future.

In addition to these challenges, blue collar workers in India also face discrimination and stigmatisation. Many people view these workers as uneducated and inferior, which can make it difficult for them to find other kinds of work or to move up the social ladder. This can also contribute to a lack of awareness about their rights and can make it difficult for them to organise and demand better working conditions and wages.

Changes the in Legal Landscape

Blue-collar workers, aside from those involved in factories and other formal employment, were not protected by law in India. The Labour laws mandate the provision of social security benefits including insurance for blue collar workers only in the organised sector. This leaves a large proportion of the blue-collar workforce engaged in informal work including gig workers, agricultural workers, casual workers, temporary workers, domestic workers unprotected and vulnerable.

Recently, a new set of labour reforms have been announced to bring India’s large informal workforce (including gig workers) into the coverage of the Labour laws and extend social security benefits to them.

These reforms include the following:

  • The four labour codes will cover gig workers under the new social security code.
  • The Employee State Insurance (ESI) scheme will cover informal workers who were earlier not covered by this comprehensive health insurance scheme.
  • Companies employing gig worker will be required to extend social security benefits to gig workers to ensure compliance.

Why Is Insurance for Blue Collar Workers Necessary?

Access To Healthcare

Insurance for blue-collar workers, especially comprehensive health coverage, is necessary as it ensures timely, cash-free/ reimbursable access to quality healthcare. Whether it is a cash-free scheme like ESI or other schemes where one makes payment and gets their claim reimbursed, the out-of-pocket expenses for blue collar workers reduces majorly. They do not have to depend on benevolent employers or take loans to get basic healthcare or wait long hours at free clinics where they may not be given priority.

Schemes like ESI extend comprehensive healthcare benefits to the blue-collar worker and all their enrolled family members. They gain access to preventive and curative healthcare including inpatient and outpatient services, medication, hospitalisation, imaging, testing and so on.

Disability Benefits

Blue-collar jobs often involve strenuous physical labour which may include long hours of sitting or standing, heavy lifting and/or even working in hazardous conditions. They lack access to basic facilities like clean water, toilets, resting spaces, etc. Overall, the nature of their work and poor (and often hazardous) working conditions exposes blue collar workers to work accidents, injuries, occupational diseases and poor health conditions.

For instance, with technology-based gig work, there is a high risk of accidents and injuries facing drivers and delivery partners as companies introduce 10-minute deliveries and instant services. These workers end up driving at high speeds, breaking traffic rules and so on which increases the chances of accidents and injuries.

Without medical insurance and other social security benefits, their out-of-pocket expenses on healthcare will increase. Further, in case of accidents, injuries or occupational disease that leaves them permanently or temporarily disabled, blue-collar workers will not be able to work. This will push them to borrowing from local moneylenders to even make ends meet, pushing them into debt traps and deeper into poverty.

Schemes such as Employee State Insurance and Employees’ Provident Fund (EPF) offer a range of disability benefits including unemployment allowance, medical benefits, paid leave, rehabilitation, etc. to blue collar workers and their dependents.

Survivorship Benefits to Family

In case of a work accident or occupational disease leading to involuntary unemployment or death of the blue-collar worker, their family will not have any financial security or will be pushed into deeper poverty. For instance, over the course of the pandemic, we saw how frontline workers such as sanitation workers, delivery persons, etc. were affected and even lost their lives since they were exposed to infection.

Insurance-related benefits for frontline workers offered by schemes such as ESI, EPF and so on enable dependents of blue-collar workers to maintain their quality of life in case of death of the blue-collar worker. These schemes offer life insurance payouts, dependent pensions, funeral expenses and much more.

Safety Net

Given the high living expenses, out-of-pocket expenses on healthcare, etc., blue collar workers are left with little to nothing to save. This means they don’t have any emergency corpus or a safety cushion to fall back on in case of a socio-economic eventuality like the Covid pandemic, a natural disaster, a work accident that leaves them unemployed and so on. Social security benefits, especially insurance for blue collar workers, equips them and their families with a safety net in such instances.

Financial Security

Insurance of blue-collar workers ensures that they and their families (especially in case of their involuntary loss of employment, disablement or death) have a sense of financial security. Life insurance, medical insurance and other elements of government insurance schemes ensures that they can lead a peaceful life knowing that they have coverage even in case of an emergency or socio-economic eventuality. They will not have to fall deeper into a debt trap or poverty.


Over 1 billion people spend at least 10% of their household budget on out-of-pocket for healthcare and this pushes half a billion people deeper into extreme poverty. Health insurance for blue-collar workers helps reduce their out-of-pocket expenses on health care. On the other hand, life insurance and retirement schemes such as EPF enable blue collar workers to save for retirement and create a solid retirement and emergency corpus.

Why are Companies/ Employers Opting for Health Insurance for Blue Collar Workers?

One of the biggest challenges facing employers today, especially in terms of their blue-collar workforce, is the high attrition rate. There is an average monthly attrition of 8-24% in the blue collar workforce which leads to more vacancies that need to be refilled in addition to the already existing and growing demand for blue collar workers. Health insurance and other social security benefits offer employers a competitive advantage in terms of attracting and retaining their blue-collar workers.

Considering the high out-of-pocket expenses and the loss of pay from going to a hospital to take care of sickness/ health conditions, blue collar workers often don’t prioritise their health. This causes their health to erode overtime while reducing their productivity. It also leads to high absenteeism. By providing health insurance to blue-collar workers, employers can ensure that they have timely access to preventive and curative healthcare. This improves their overall health and boosts their productivity while reducing absenteeism.  

In some cases, it is a legal and compliance necessity to provide health insurance to blue-collar workers. In India, the changes in the Labour codes will make it compulsory for those employing gig workers to do so too. Compliance and legal compulsions aside, providing insurance also improves the level of trust blue collar workers have on employers and boosts their loyalty and commitment to work. It improves the employer’s brand and earns goodwill.

What Should Insurance for Blue Collar Workforce Include?

Medical and sickness benefits to improve their health.

Given how important health insurance is, insurance for blue-collar workers must include comprehensive healthcare coverage, enabling them and their families to access cash-free preventive and curative care. The health insurance should ensure that they don’t have to pay out-of-pocket and must be able to access inpatient and outpatient care, medication, imaging, testing, hospitalisation, rehabilitation, etc. without upper limits on expenditure at allotted group hospitals.

There is both physical exertion and mental stress for blue collar workers. So, the health insurance scheme should enable them to access mental health services too.

The dependents of the insured worker should be able to access these healthcare benefits even if the worker is permanently disabled or dies in service.

Improve financial wellness and prepare them for contingencies.

The insurance benefits offered to blue-collar workers must boost their financial wellness, equip them with a safety cushion and prepare them for any emergency, contingency or socio-economic eventuality. This could be work injury or occupational disease that leads to an involuntary loss of employment. It could also be a natural disaster or a force majeure event like a war or global pandemic that leads to a loss of employment, loss of life or assets. Government schemes such as ESI and EPF do just that. They provide blue collar workers with a much-needed safety net to face any crisis situation more effectively.

Easier access to emergency funds.

Insurance for blue-collar workers must also include retirement planning and life insurance coverage. This enables blue collar workers to create a solid emergency fund to meet contingencies. EPF, for instance, helps workers to build a solid retirement and emergency corpus that can be used to meet critical needs.

How To Choose Insurance for Blue Collar Workers?

Consider coverage

Blue collar workers have low incomes. That is why it is important to ensure that they have full coverage to include the specific risks associated with their work including accidents, injuries, occupational diseases, etc. If the policy does not offer full coverage, the workers will have to end up paying for medical expenses out of pocket, which beats the purpose of health insurance itself.

Access to cash free benefits

Consider investing in government health insurance policies such as ESI which extend cash-free access to comprehensive healthcare benefits to the worker and their dependents. If the policy follows a reimbursement model, then the worker will be forced to borrow to pay the medical bills upfront apart from navigating the complexities of filing claims and getting reimbursements.

Disablement benefits

In case of disablement or death 

The insurance benefits should ensure that the dependents of the workers get support in case of the death or disablement of the insured worker. This will ensure that the family does not fall into a debt crisis or deeper poverty when the income of the primary breadwinner is lost.

In case temporary disablement 

If the blue collar worker is temporarily disabled, the insurance benefits should cover the costs of rehabilitation, vocational training and upskilling to help them get back to work while offering unemployment allowance in the interim.

Retirement savings and pensions

Lastly, the insurance benefits for blue collar workers should also cover retirement savings and pensions. It should help them create a solid corpus and reliable source of income even after they retire, ensuring their financial independence as they age.

The ESI and EPF schemes in India provide all these features and much more to blue collar workers. But these schemes do not cover informal workers such as gig workers, household help, etc. This is where the TankhaPay app comes in, enabling even individual employers and households to extend comprehensive social security benefits to all their informal workers.


The plight of blue-collar workers in India is a complex issue that requires a multi-faceted approach to address. This includes improving working conditions and wages, providing social security benefits, and combating discrimination and stigmatisation. The provision of insurance for blue-collar workers enables employers to address some of these issues while enabling their workers to lead dignified, quality lives.


The value and cost of health insurance is determined by a number of factors such as the organisation’s size, workers’ average age, general level of health of the workforce and so on. It is necessary to consider the average age and overall level of employee health in particular, not just the organisation’s size. It is equally important to consider coverage, upper limits on expenses and other benefits offered by the health plan to the blue-collar worker.

Employers must offer blue-collar workers comprehensive health insurance, paid medical and maternity leave, vacation time, access to mental health services, comprehensive disablement benefits, life insurance, survivorship benefits and retirement savings.

Want to know more about insurance schemes for blue-collar workers or how you can enrol your blue-collar employees into it?

Download the TankhaPay app now

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