Karnataka Governor Thawarchand Gehlot on Tuesday, May 27 approved the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Ordinance, 2025, establishing a legal framework for protecting and supporting gig workers across the state. The ordinance mandates that aggregator platforms such as Zomato, Swiggy, Ola, Uber, Amazon and others pay a welfare fee between 1 to 5 percent of each transaction made with gig workers.
This fee, which will be collected quarterly and deposited into the Karnataka Gig Workers Social Security and Welfare Fund, will form the funding mechanism for the newly announced social security system. The welfare fee structure will be notified by the state government within six months and will differ by category of platform.
Aggregators are required to register with a newly formed Karnataka Gig Workers Welfare Board, which will also oversee a Payment and Welfare Fee Verification System (PWFVS) designed to track payments and deductions. In case of delayed payments, aggregators will be liable to pay 12 percent simple interest annually from the due date. Non-compliance may result in fines of up to Rs 5,000 for the first offence and Rs 1 lakh for subsequent violations.
The Karnataka Gig Workers Welfare Board will consist of 16 members, including the Labour Minister, officials from the Labour and IT departments, four representatives of gig workers, four representatives of aggregator platforms, and two civil society members. All gig workers in the state will be issued a unique ID, valid across platforms.
Aggregators will be required to maintain transparent contracts that clearly define payment schedules, incentives, rights, and conditions, including a worker’s right to refuse tasks. Workers cannot be suspended or terminated without a written explanation and a 14-day notice period, except in cases involving violence or harm.
The ordinance lays down strict rules for how platforms must operate, including the need to disclose how their automated systems make decisions that affect workers. These algorithms must not discriminate based on gender, caste, religion or on any other basis. Platforms must also disburse payments on a fixed schedule be it daily, weekly, biweekly, or monthly, without unjustified delays. Deductions must be transparently detailed in invoices.
A two-tier grievance redressal mechanism has been set up to address complaints, both against the platform and the board. Aggregators are also required to submit electronic quarterly returns, though the government may notify them to file returns half-yearly or annually instead.
The ordinance applies to a broad range of services including ride-sharing, food and grocery delivery, logistics, e-marketplaces (both inventory and marketplace models), professional services, healthcare, travel and hospitality, and content and media services. The ordinance will remain in effect until it is formally passed by the state legislature.