The Karnataka cabinet on Friday, April 11, approved a landmark bill aimed at creating a dedicated welfare fund for gig workers employed by major aggregator platforms such as Amazon, Flipkart, Ola, and Uber. The Platform Based Gig Workers (Social Security and Welfare) Bill will be implemented through an ordinance, Law and Parliamentary Affairs Minister HK Patil confirmed, MoneyControl reported.
The proposed legislation seeks to introduce a 1–5 % cess on aggregator platforms to generate funds for the welfare of gig workers. The bill also provides for the creation of a Gig Workers’ Welfare Board, similar to the welfare board that exists for construction workers. “The government will soon bring in an ordinance to enforce this bill,” said Patil.
The welfare board, as envisaged in the bill, will include the state labour minister, two representatives each from workers and aggregators, a civil society member, and four government officials. A chief executive officer appointed by the state will handle the board’s daily operations.
The bill has been welcomed by gig workers and their unions, who see it as a long-overdue recognition of their rights. Once implemented, workers employed by at least 12 major companies—including Amazon, Flipkart, Swiggy, Zomato, Ola, Uber, and Dunzo—will receive social security benefits. These will be funded through a small deduction based on the distance covered by gig workers while delivering goods or services, Chief Minister Siddaramaiah said.
The bill also includes provisions empowering gig workers to terminate contracts without losing accrued entitlements. This is seen as a move to give them greater agency and protection in an industry often criticised for precarious employment conditions.
However, industry bodies such as the National Association of Software and Service Companies (NASSCOM) and the Internet and Mobile Association of India (IAMAI) have expressed concerns. They fear the bill could impose a significant financial burden on aggregator businesses, particularly startups operating on narrow margins. These organisations have warned that certain provisions could affect Karnataka's ease of doing business and may disincentivise investment in the state's digital economy.
Despite this, the government has indicated it may supplement the welfare fund with additional state contributions to ease the pressure on companies. A high-level meeting involving Chief Minister Siddaramaiah, Labour Minister Santosh Lad, IT Minister Priyank Kharge, and Industries Minister MB Patil was held at Congress leader Rahul Gandhi's residence in Delhi to finalise the implementation roadmap. The legislation is seen as part of the Congress party’s election commitments, made during the Bharat Jodo Yatra and 2023 Assembly and 2024 Lok Sabha campaigns.
A draft of the bill was published in July 2024 and was initially scheduled to be tabled during the monsoon session in Belagavi. However, it was put on hold after feedback was sought from industry stakeholders. The ordinance route now appears to be the government’s preferred path forward to fast-track its implementation.