In a major policy reform to protect the rights of gig economy workers, the Government of Karnataka has officially enacted the Karnataka Platform Based Gig Workers (Social Security and Welfare) Act, 2025. The Act, published in the Karnataka Gazette on September 12, 2025 and effective from May 30, 2025, is aimed at providing social security, fair work conditions, and welfare support for platform-based gig workers across the state.
Purpose of the Act
The Act addresses the growing concerns over the lack of protections for gig workers—those who provide services via digital platforms such as ride-hailing apps, food delivery, logistics, freelancing platforms, and more. It introduces legal obligations on aggregators or platforms to contribute to workers’ welfare, ensure transparency in algorithms, and support dispute resolution.
Key Highlights of the Act:
✅ Scope and Applicability
- Applies to all aggregators/platforms operating in Karnataka across scheduled services.
- Covers all platform-based gig workers onboarded by such platforms, regardless of work duration.
🏛 Establishment of the Gig Workers’ Welfare Board
- The Karnataka Platform Based Gig Workers Welfare Board will oversee implementation.
- Headquartered in Bengaluru.
- Board includes government officials, gig worker and platform representatives, civil society members, and IT/data experts.
📋 Registration Requirements
- Platforms must register with the Board within 45 days of the Act’s commencement.
- Gig workers to receive a Unique ID usable across all platforms.
- The Board will maintain a state-wide gig worker database.
💸 Welfare Fund & Fee
- Creation of the Karnataka Gig Workers’ Social Security and Welfare Fund.
- Funded by:
- Welfare fee of 1–5% of gig worker payouts per transaction from platforms.
- Gig worker contributions, and government grants.
- Platforms must deposit the welfare fee quarterly.
⚖️ Gig Workers’ Rights
- Right to social security benefits, even with multiple platforms.
- Right to transparent contracts, earnings info, and refusal of tasks.
- Access to a grievance redressal system.
🤖 Algorithmic Transparency
- Platforms must explain automated systems (e.g., pricing, ratings) in simple language.
- Must ensure non-discrimination by automated systems on grounds of gender, caste, religion, etc.
📑 Fair Contracts
- Contracts must be clear, fair, and upfront about rates, deductions, and incentives.
- Any contract changes require 14 days’ prior notice.
📈 Monitoring & Reporting
- Platforms must submit quarterly returns electronically to the Board.
- Annual audits and reports by the Board will be presented to the State Legislature.
🛑 Penalties for Non-Compliance
- Up to ₹5,000 fine for first offence; ₹1 lakh for repeated violations.
- 12% interest on delayed welfare fee payments.
✅ Repeal and Saving Clause – Explained
- The Karnataka Platform Based Gig Workers (Social Security and Welfare) Ordinance, 2025 (Karnataka Ordinance No. 04 of 2025) is officially repealed by this Act.
- This means the temporary ordinance that was promulgated earlier in 2025 to address the same issue is now replaced by the permanent Act passed by the legislature.
Saving Clause
- Despite the repeal of the ordinance, all actions taken or decisions made under it are considered valid.
- Any rules, notifications, registrations, or appointments done under the Ordinance will continue to be in effect as if they were made under the new Act.
Impact on the Gig Economy
With Karnataka becoming one of the first states in India to introduce a comprehensive legal framework for gig workers, the Act is expected to:
- Improve job security and benefits for lakhs of gig workers.
- Encourage accountability among digital platforms.
- Set a precedent for other states and the central government.
This move is being hailed as a major step towards making the gig economy more inclusive and equitable, while balancing innovation with worker protection.