Karnataka government will soon set up a Payment and Welfare Fee Verification System (PWFVS) to digitally track every transaction and welfare fee deduction made towards gig workers’ social security.
The new system is part of the draft Karnataka Platform-based Gig Workers (Social Security and Welfare) Rules, 2025, published on June 27 for public consultation.
“Aggregators must upload transaction details to the verification portal every quarter. The data will include the welfare board-issued unique ID, e-Shram Universal Account Number (UAN), payout amount, welfare fee remitted, transaction date, and the platform identifier”, it said.
Welfare fee between 1% and 5%
Under the proposed rules, aggregators must calculate and remit a welfare fee of 1% to 5% of each payout made to a gig worker. These contributions are to be deposited into a government-managed welfare fund every quarter through RBI-approved payment modes. Delays beyond 30 working days will attract interest unless due to technical issues on the portal.
The contributions will count towards Corporate Social Responsibility (CSR) spending and qualify for income tax deductions. The fund, managed by a Board, will be used for welfare schemes and social security benefits for gig workers.
Aggregators failing to register or remit the welfare fee on time may face penalties. The Board is empowered to issue show-cause notices and impose fines, which must be paid within 30 days. Aggregators can appeal these orders to the state government.
Mandatory registration and worker data sharing
All aggregator platforms will be required to register on a government portal and submit machine-readable data of workers engaged with them for at least 90 days and who have completed at least one assignment.
The data must include name, mobile number, operating city or district, and the e-Shram UAN. Data submissions must be encrypted to ensure confidentiality and security.
The rules make it mandatory for each aggregator to set up an Internal Dispute Resolution Committee (IDRC) to handle grievances related to termination, payments, and other employment issues. Workers must be able to file appeals within seven working days of termination and receive a response within 15 days. Unresolved disputes may be escalated to the state Board.
Also, read: Congress woos gig workers with welfare fund from transaction fee on aggregator platforms
Aggregators will be required to provide workers with information on how fares, ratings, and payouts are determined. While the disclosure of proprietary algorithms or source code is not mandatory, workers must have access to relevant data if they have completed at least one assignment in the preceding 90 days. The Board will develop sector-specific occupational safety and health standards in consultation with experts and platform representatives. Aggregators must comply with these standards within six months of notification.
The rules also mandate that aggregator platforms publish information on grievance redressal, accident compensation, insurance schemes, anti-harassment procedures, and social security claims on their digital interfaces to ensure transparency and access.
Two expert working groups constituted
To implement these provisions, the state government has set up two working groups. According to a notification dated June 30, 2025, Working Group 1 will prepare the IT framework, determine welfare cess rates for different aggregator models, and develop eligibility and benefit guidelines for social security schemes.
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