The increasing prevalence of physical and psychological distress in occupational health is a significant contemporary challenge across diverse global working demographics. Failure to address these issues promptly can lead to severe consequences, affecting an employee’s physical, social, and professional aspects. However, there is limited understanding of the predictors of psychological distress among low-skilled gig and nongig informal working professionals in India. Our research utilizes the Scotland Fair Work Framework and General Health Questionnaire to highlight various dimensions of job quality, including workers’ rights, social protection, work-time conditions, a compelling voice, respect, career progression opportunities, and mental well-being. Under this framework, we comprehensively evaluate low-skilled compared to conventional nongig workers, providing insight into the relationship between working conditions and mental health. The results indicate that low-skilled gig workers experience higher levels of physical stress and psychological distress, along with lower mental well-being than nongig workers. Poor job quality and working conditions, social dysfunction, loss of confidence, anxiety, and depression also appear to be more pronounced among gig than nongig workers. The research contributes to the global conversation on the correlation between employment features and mental well-being, offering valuable policy insights indicating that there is a great need to enhance labor regulations to ensure fair working conditions for low-skilled gig workers in India’s emerging labor force.