Govt. of Karnataka has enforced the Gig workers-related law through the promulgation of an ordinance dated 27.5.25, which is titled as The Karnataka Platform-based Gig Workers (Social Security and Welfare) Ordinance 2025. It is not the first time that the State Govt has introduced this law. It was also attempted in 2024 through a bill but it could not get through.
Now it can be said that the Karnataka State has become the first state to have its law on security and welfare of Gig workers in the state which has now been made notified and enforced. Though, Rajasthan was the first State who formulated the law for the security and welfare of gig workers to regulate this informal work arrangement fastly developed due to emergence of tech platforms overturning the work, workplace and workforce model in the country. This Act was passed in 2023 but to make the Act enforced, rules are to be framed by the Government. The Rules related to this Act have not been published and put in public domain so far.
The Karnataka state Ordinance aligns with the Code on Social Security, 2020, but operationalizes protections at the state level, addressing the gap left by the above which has not been enforced so far. Its emphasis on welfare, transparency, and grievance redressal places Karnataka as a leader in gig work model regulation.
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Leaving the background aside, The Karnataka Govt have properly and inclusively understood the gig workers issues and come out with this law which aims to govern the platforms, aggregators, provide security to Gig workers , address their grievances and working conditions and remuneration etc. and have directly addressed the evolving nature of gig work by positioning aggregators and platforms as principal actors in workers’ social security, despite not being traditional employers. Karnataka’s Ordinance has emerged as a more practical and gig worker-centric model in the modern work model regulated by technology offering both substantive social protection and robust accountability tools likely to be more enforceable in practice.
Key Obligations for Aggregators/Platforms:
- Registration:
- Must register with the Karnataka Platform-Based Gig Workers Welfare Board within 45 days of the Ordinance’s commencement.
- Submit a comprehensive database of all onboarded gig workers within the same period.
- Ensure all new gig workers are registered with the Welfare Board within 30 days of onboarding, with a unique ID issued for each worker, linked to a social security account.
- Welfare Fee:
- Pay a Platform-Based Gig Workers Welfare Fee of 1%–5% of each gig worker payout, to be deposited quarterly into the Karnataka Gig Worker’s Social Security and Welfare Fund.
- Report fee deductions per transaction via the Payment and Welfare Fee Verification System (PWFVS), with public disclosure on the PWFVS portal.
- Non-payment incurs 12% per annum simple interest on overdue amounts.
- Contractual Obligations:
- Provide fair, transparent contracts in simple language (Kannada, English, or Eighth Schedule languages), detailing payments, incentives, deductions, and the right to refuse tasks.
- Notify gig workers of contract changes with 14 days’ prior notice.
- Termination Provisions:
- Issue 14 days’ written notice with reasons before terminating or deactivating a gig worker (except in cases of bodily harm), with a right to appeal.
- Grievance Redressal:
- Establish an Internal Dispute Resolution Committee (IDRC) to address gig worker complaints within 14 days, with full resolution within 45 days and a written Action Taken Report.
- Unresolved grievances can be escalated to the Welfare Board, whose decision is final.
- Provide access to a grievance redressal officer or Ombudsman for issues related to social security benefits, with appeals possible within 90 days to an Appellate Authority.
- Transparency and Disclosures:
- Disclose automated decision-making processes (e.g., task allocation, pay, ratings) in a clear, worker-understandable language.
- Ensure non-discrimination in automated systems based on religion, caste, gender, disability, or place of birth.
- Make grievance mechanisms accessible via the platform interface.
- Working Conditions:
- Ensure a safe, hygienic work environment with reasonable access to rest breaks and sanitation facilities.
- Comply with sector-specific occupational safety and health standards.
- Point of Contact:
- Provide a human point of contact fluent in Kannada, English, or other Eighth Schedule languages for gig worker queries related to the Ordinance.
- Penalties for Non-Compliance:
- Fines of up to INR 5,000 for the first violation and up to INR 1,00,000 for subsequent violations.
- Additional penalties may be prescribed under forthcoming rules.
- Reporting:
- Submit quarterly returns to the Welfare Board in the prescribed format, with potential shifts to half-yearly or annual filings as notified.
- Maintain comprehensive records of gig workers (names, contact details, engagement terms) for scrutiny.
Implications for Aggregators/Platforms:
- Increased Compliance Burden: Platforms must align operations with the Ordinance’s requirements, including registration, fee contributions, and grievance mechanisms, which may raise operational costs. These costs could be passed on to consumers, potentially affecting pricing for services like ride-hailing or food delivery.
- Contract and Policy Revisions: Existing contracts and policies must be reviewed and updated to meet transparency, fairness, and language requirements, ensuring compliance with termination and grievance processes.
- Operational Challenges: Providing rest breaks and sanitation facilities is complex given the mobile, flexible nature of gig work. Platforms may need innovative solutions (e.g., partnerships with local businesses for restroom access).
- Data Management: Maintaining and sharing detailed gig worker databases with the Welfare Board requires robust data systems, raising concerns about data privacy and security.
- Multi-State Operations: Platforms operating across India may face increased complexity due to varying state regulations, as Karnataka’s framework is more comprehensive than those in Rajasthan, Jharkhand, or Telangana.
- Precedent for Other States: Karnataka’s Ordinance may inspire similar laws elsewhere, potentially leading to a patchwork of compliance requirements for national platforms.
Immediate Actions Required:
- Assess Applicability: Verify if platform services fall under the Ordinance’s Schedule (e.g., ride-sharing, delivery, e-marketplaces).
- Register with Welfare Board: Complete registration and submit gig worker databases within 45 days of the Ordinance’s commencement.
- Budget for Welfare Fee: Plan for the 1%–5% fee contribution and integrate with PWFVS reporting.
- Revise Contracts: Update gig worker contracts to comply with transparency, fairness, and notice requirements.
- Set Up Grievance Mechanisms: Establish an IDRC and ensure accessible grievance processes.
- Appoint Point of Contact: Designate a multilingual human contact for gig worker queries.
- Ensure Transparency: Disclose automated system logic and confirm non-discrimination compliance.
What is required?
Platforms must act swiftly to comply, review work agreements with gig workers, introduce more transparency in payment mechanisms, and create grievance redressal mechanisms, as non-compliance carries financial and reputational risks. The Ordinance’s framework could reshape the gig economy in Karnataka, striking a balance between worker protections and the flexibility of platform-based work; however, its implementation will require close coordination among the state, platforms, and gig workers.
The legal framework imposes a clear set of obligations on platforms: mandatory registration with a state welfare board, payment of a statutory welfare fee, transparent contract terms, and explicit requirements for transparency in automated decision-making systems. Notably, the ordinance requires platforms to provide accessible information about algorithmic management, ensure human points of contact for worker support in multiple languages, and make grievance and dispute resolution easily available via app interfaces.
What is left for the Government is to table this ordinance in next coming assembly session and get it passed through and convert it into Act after Hon’ble Governor approval.
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