Karnataka Gig Workers Act: What the law says and why it's contested

The Act promises greater social security for app-based workers, but delivery platforms have challenged it in court. Here's what the law does and why it is being challenged

  The convenience of having food, groceries, and essentials delivered at the tap of a button depends on millions of gig workers who keep India's digital economy moving. However, unlike traditional employees, most gig workers have had limited access to social security, accident cover, or welfare benefits.

 

Karnataka's Platform-Based Gig Workers (Social Security and Welfare) Act, 2025 seeks to change that by creating a dedicated welfare framework for platform workers. The legislation follows similar efforts by Rajasthan, Bihar, Jharkhand, and Telangana.

 

The Act is back in focus after several food delivery and quick commerce platforms challenged it in the Karnataka High Court. While the court refused to put the law on hold for now, the legal challenge is ongoing.

 

 

What is Karnataka's Gig Workers Act?

 

The legislation is one of several state-level laws designed to provide social security and welfare benefits to gig workers. The law establishes a welfare fund for gig workers, requires platform companies to contribute toward it, and brings in measures to improve transparency, grievance redressal, and accountability in the platform economy.

 

The Act applies to workers providing services through digital platforms, including food and grocery delivery, ride-hailing, ecommerce, home services, and freelance or professional services booked through app.

 

It requires platforms operating in Karnataka to register under the Act, while eligible gig workers can also register to access welfare schemes.

 

How will the Act benefit gig workers?

 

The legislation introduces several protections that were largely absent for gig workers.

 

A dedicated welfare fund

One of the biggest changes is the creation of the Karnataka Gig Workers' Social Security and Welfare Fund. The fund will finance welfare measures through contributions collected from platforms, government grants, worker contributions where applicable, and donations.

 

Welfare fee paid by platforms

The Act requires aggregators to pay a welfare fee on transactions involving gig workers. The legislation allows the state government to levy between 1 to 5 per cent of the worker payout, although Karnataka later notified a 1 per cent fee with transaction-wise caps for different services.

 

Greater transparency

The law also seeks to make platform operations more transparent by requiring companies to:

 

• Provide clear information on payments and deductions
• Establish grievance redressal mechanisms
• Nominate contact persons for workers
• Offer communication in Kannada, English, or another recognised language understood by the worker

 

Better social protection

The welfare fund can be used to support measures such as accident insurance, health benefits, and other social security initiatives for registered workers.

 

Why are platforms protesting the law?

 

Several major platforms, including Swiggy, Zomato, Zepto, and Internet and Mobile Association of India (IAMAI), challenged the Act before the Karnataka High Court. Their objections broadly centre on four issues:

 

• Overlap with central law - The companies argue that the central Code on Social Security, 2020 already provides a framework for gig workers. Therefore, they contend that Karnataka cannot create a parallel regulatory regime that could lead to conflicting obligations
• Higher compliance burden - Platforms say the Act introduces additional registration requirements, reporting obligations, grievance systems, and record-keeping responsibilities, increasing operational complexity
• Welfare fee could increase costs - Companies argue that mandatory welfare contributions will raise operating costs, particularly for businesses that already work on thin margins. These additional costs could eventually affect pricing, investments, or expansion plans
• Constitutional concerns - The petitions also question the constitutional validity of both the Act and the Rules framed under it, arguing that the legislation exceeds the state's legislative powers in areas already covered by central law

 

What did the Karnataka High Court say?

 

Last week, the Karnataka High Court declined to stay the Act's implementation while hearing petitions filed by platforms challenging the legislation. The court directed companies including Swiggy, Zomato, Blinkit, and Zepto to deposit the welfare fee for the second quarter.

 

During the hearing, the court reportedly observed that both the central and state legislations are rooted in the objective of promoting social justice for gig workers. However, the constitutional challenge to the Act remains pending.

 

Which other states have similar laws?

 

• Rajasthan became the first state to pass the Rajasthan Platform-Based Gig Workers (Registration and Welfare) Act in 2023. The law established a welfare board, created a welfare fund, and mandated the registration of gig workers and aggregators.
• Bihar enacted its gig workers' welfare law last year, providing for the registration of gig workers, the creation of a welfare board, and social security benefits.
• Jharkhand passed its gig workers' welfare law in 2025. It provides for worker registration, social security benefits, grievance redressal, and links the welfare framework to existing labour welfare schemes.
• Telangana passed the Telangana Platform-Based Gig Workers Bill in 2026. The law provides for worker registration, a welfare board, a welfare levy on platform transactions, and benefits such as insurance, pensions, and maternity support.