In a major move aimed at improving the working conditions, social security, and legal protections for the rapidly growing segment of gig economy workers, the Governor of Karnataka has promulgated the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Ordinance, 2025. The Ordinance was published in the Karnataka Gazette Extraordinary on May 27, 2025.
This historic legislation, issued under Article 213(1) of the Constitution, addresses the urgent need for a structured social security and welfare framework for gig workers—individuals who earn livelihood through digital platforms, including ride-hailing, food delivery, freelance services, and e-commerce logistics.
Key Provisions of the Ordinance
The Ordinance applies to:
- All aggregators or platforms operating in Karnataka and offering services listed in the Schedule;
- All gig workers registered with the proposed Karnataka Platform-Based Gig Workers Welfare Board;
- Platforms employing automated or semi-automated systems for decision-making that affect working conditions.
1. Creation of Welfare Infrastructure
- Welfare Board: The Karnataka Gig Workers Welfare Board will be established to oversee implementation.
- Welfare Fund: A dedicated fund for gig workers will pool contributions from aggregators, gig workers, and government grants.
- Unique ID: Each registered gig worker will receive a state-issued unique identification number, applicable across all platforms.
2. Workers’ Rights
The Ordinance codifies a wide range of rights, including:
- Right to registration, irrespective of tenure;
- Access to healthcare and social security schemes;
- Fair contracts with full transparency;
- Right to be informed about automated systems impacting their earnings or ratings;
- Protection against unjust termination and the right to prior notice and appeal (except in serious misconduct cases).
3. Accountability and Fair Practices for Aggregators
Aggregators must register with the Board within 45 days of the Ordinance’s commencement.
Contracts must provide for clear payment structures, no sudden changes without notice, and non-discriminatory automated systems.
Payments must be disbursed on a weekly or shorter cycle, with full justification for any deductions.
Platforms must ensure reasonable working conditions, including rest periods and access to sanitary facilities.
4. Welfare Fee and Financial Monitoring
Aggregators are mandated to pay a Welfare Fee of 1% to 5% per transaction, as notified by the State Government.
A Payment and Welfare Fee Verification System (PWFVS) will track transactions and ensure timely contributions and transparency.
5. Grievance Redressal Mechanism
A two-tier grievance system has been laid out:
- Internal Dispute Resolution Committees within platforms;
- Escalation to the Welfare Board, which acts as a final authority.
Appeals against the Board’s decisions can be filed with an Appellate Authority within 90 days.
6. Penalties and Enforcement
Aggregators failing to comply with Welfare Fee payments may face 12% interest per annum on unpaid amounts.
Fines up to ₹5,000 for a first violation and ₹1 lakh for repeated offences are applicable.
Karnataka becomes the first Indian state to introduce a legal framework for platform-based gig workers. It fills a critical gap in labor protections and reflects evolving labor dynamics in India’s digital economy.
The move comes amid growing national and international concern over the precarious nature of gig work, especially in light of automation, algorithmic bias, and lack of job security.
