Over 90% of informal workers opt for formal contracts with health benefits

Almost all (93%) informal workers claim that if an employer offered them a job with health benefits and a formal agreement as opposed to a higher salary without a contract, they would take it, reveals a survey by Bengaluru-based business services provider Quess.

Furthermore, 80% of the informal employees expect their employers to provide them with the security of Employee State Insurance (ESI) and other medical benefits, says Quess in its “New-Collar Generation” report in which the findings of the survey are published. The expectation of ESI is even higher for the younger, informal employees (83%: aged 18 to 25; 81%: aged 26 to 35).

Interestingly, 79% of respondents claim they would compromise on 20% or more of their salary if the decision brought security and benefits equivalent to those of their formal counterparts (78%), indicating that the New-Collar Generation’s priorities and aspirations are converging with those of formal employees and that they value security and benefits over their daily wages.

Quess says that due to the chaos and confusion resulting from the COVID-19 virus and the resulting confinement, health benefits and life insurance have become paramount. To reiterate — four in every five informal employees (80%) expect ESI, and two in every three informal employees (69%) expect life insurance from their employer,”

The report is based on interviews with 4,179 respondents of all ages. It covers respondents from seven metros—Delhi, Mumbai, Bengaluru, Chennai, Hyderabad, Kolkata and Pune—and seven non-metros, Ahmedabad, Baroda, Coimbatore, Indore, Lucknow, Ludhiana and Nashik. It was conducted between September 2022 and January 2023.

The Provident Fund and Employee State Insurance Scheme are two social security covers that provide facilities of socio-economic and medical benefits to employees.