Karnataka government notifies Gig Workers Act with 1-5% welfare fee on aggregators

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Karnataka government on September 12 notified the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Act, 2025, which proposes a welfare fee of 1-5 percent of payouts made to gig workers per transaction, to be levied on aggregator platforms.

The Act aims to safeguard the rights of gig workers and ensure accountability of digital platforms and aggregators.

The Act provides for social security, occupational health and safety, transparency in automated monitoring and decision-making systems, and grievance redressal mechanisms. It also mandates the establishment of a dedicated Gig Workers Welfare Board and the creation of a Social Security and Welfare Fund for registered workers across the state. The Fund will receive contributions from platforms, gig workers, government grants, and other sources, with no more than five percent of its corpus allocated to administrative costs.

Also, read: Karnataka to collect 5% cess from aggregator platforms like Amazon-Flipkart, Ola-Uber for Gig Workers' Fund: Siddaramaiah

The Act covers gig workers who provide services through aggregators or platforms, including ride-sharing services, food and grocery delivery services, logistics services, e-marketplaces (both marketplace and inventory models) for wholesale or retail sale of goods and/or services, business-to-business (B2B) or business-to-consumer (B2C), professional activity providers, healthcare services, travel and hospitality services, and content and media services.

The Act applies to all aggregators and platforms operating in Karnataka across sectors such as ride-sharing, food and grocery delivery, logistics, e-commerce, professional services, healthcare, travel and hospitality, and digital media. Every gig worker onboarded by such platforms will be registered with the board and issued a unique ID, giving them access to social security schemes, minimum payout cycles, grievance redressal systems, and safeguards against arbitrary termination.

Also, read: Karnataka cabinet clears gig workers welfare bill, proposes 1-5% welfare fee on Amazon, Uber, other platforms

Headquartered in Bengaluru, Gig Workers Welfare Board will be chaired by the state labour minister and include senior officials from the labour, IT, and commercial taxes departments, as well as representatives of gig workers, aggregators, civil society, and technical experts. The Board will implement social security schemes, monitor platform compliance, engage with worker associations, and advise the government on policy.

The Act also sets clear rules for contracts, mandating transparency in payments, deductions, and incentives, while preserving the worker’s right to refuse tasks. Platforms are required to disclose details of automated monitoring and decision-making systems in simple language, provide a human point of contact for queries, and maintain reasonable working conditions, including rest periods and access to basic facilities.

For grievances, gig workers will have access to a two-tier mechanism, first through Internal Dispute Resolution Committees set up by platforms and then through the Board if issues remain unresolved. The Act also provides for penalties, including fines of up to Rs 1 lakh for repeated violations, and mandates quarterly submission of returns by aggregators.

Also, read: Karnataka Assembly passes Bill for welfare of gig workers