The Karnataka government on Friday notified the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Act, 2025, introducing one of the country’s most comprehensive regulatory frameworks for the gig economy.
The law mandates that aggregator platforms across sectors — from ride-hailing and food delivery to e-commerce, healthcare, and digital media — contribute a welfare fee of 1-5 per cent of pay-outs per transaction to fund social security for gig workers.
The Act provides for social security, occupational health and safety, transparency in automated systems, and grievance redressal, and requires the creation of a dedicated Gig Workers Welfare Board, headquartered in Bengaluru.
The Board will be chaired by the state labour minister and include officials from the labour, IT, and commercial taxes departments, along with representatives of gig workers, aggregators, civil society, and technical experts.
Every gig worker onboarded by a platform will be registered with the board and issued a unique ID, enabling access to social security schemes, minimum payout cycles, and safeguards against arbitrary termination.
The law also caps administrative expenses of the welfare fund at 5 per cent of the total corpus, ensuring most contributions flow directly to workers’ benefits.
The framework applies to a wide range of services including ride-sharing, logistics, food and grocery delivery, B2B and B2C e-commerce, travel and hospitality, healthcare, and digital content platforms.
The law sets out clear rules for contracts, requiring platforms to maintain transparency on payments, deductions, and incentives, while upholding the worker’s right to refuse tasks.
Platforms must disclose details of algorithmic monitoring and decision-making systems in simple terms, provide a human point of contact, and ensure basic working conditions such as rest breaks and access to facilities.
A two-tier grievance mechanism has also been laid out: Internal Dispute Resolution Committees within platforms, followed by escalation to the Board. Non-compliance will invite penalties of up to ₹1 lakh for repeated violations, while aggregators must file quarterly returns to demonstrate compliance.
By institutionalising gig worker rights and mandating contributions from platforms, Karnataka has become the first state to push through a comprehensive social security net for platform-based workers, a move that is likely to be closely tracked by other states and the Centre.
Published on September 13, 2025