Karnataka Gig Workers' Bill could impact ease of business in the state, warns IAMAI

IAMAI criticised the lack of clarity in the draft bill, pointing out that mandatory registration and benefit implementation are challenging due to the dynamic nature of gig work.

Internet and Mobile Association of India (IAMAI) has raised concerns over the Karnataka Gig Workers' draft bill, warning that it could hinder business operations and negatively impact the ease of doing business in the state.

IAMAI, representing more than 600 Indian and multinational corporations in the digital services industry, urged the Karnataka government to provide another 30-60 days for stakeholder consultation.

"The gig economy is an evolving sector, and any new regulations will have far-reaching ramifications for workers, platforms, and the larger ecosystem. All stakeholders must have an opportunity to provide inputs and voice their concerns before such a law is enacted," IAMAI stated in a letter to the state labour department.

Also, read: Karnataka to make registration must for aggregators to hire gig workers, law in the work

The letter further urged the state government to reconsider proposed clauses in the bill, emphasising the need to balance the objectives of gig workers' welfare without imposing 'unrealistic expectations' on aggregators.

IAMAI also highlighted that the Code on Social Security mandates aggregator companies to contribute between 1-2 percent of their annual turnover to the Social Security Fund. “The draft bill's proposal for a similar levy on gig workers could lead to a dual financial burden on aggregators, many of whom are already operating at a loss," it said.

On benefits for gig workers, IAMAI criticised the lack of clarity in the draft bill, pointing out that mandatory registration and benefit implementation are challenging due to the dynamic nature of gig work.

"Mandating perpetual registration for gig workers creates an unnecessary administrative and financial burden on both workers and aggregators. Gig workers often engage across multiple platforms and in diverse types of work, making it difficult to accurately track their work status and earnings," it said.

Also, read: Draft gig worker bill: Karnataka likely to impose per transaction fee for welfare fund

"The significant rise in operational costs for aggregators due to proposed fees can impede the sustainable growth of the gig economy in Karnataka," IAMAI highlighted.

The draft bill proposes calculating welfare fee contributions based on either a percentage of a gig worker's transactional pay or the aggregator's annual turnover, as determined by the state government.

"A percentage charge on transactions might impose a heavier burden on platforms with higher transaction volumes (both in terms of number and total value per transaction). In contrast, a turnover-based model could disproportionately burden companies with higher revenue, especially conglomerates with multiple businesses, some of which do not employ gig workers at all," it said.

IAMAI raised concerns over a provision to map transaction-level payment data to a proposed Central Transaction Information and Management System (CTIMS), citing potential impacts on aggregator competitiveness and data privacy laws.

"The mandatory 14-day termination notice lacks flexibility in addressing situations such as law and order issues, violence, or stolen packages. We recommend a balanced approach that considers specific termination circumstances and allows exceptions for serious misconduct or legal violations by gig and platform workers," IAMAI suggested.

Also, read: Karnataka draft bill: Aggregators cannot terminate gig workers without 14-day notice