Karnataka Promulgates Ordinance for Social Security and Welfare of Gig Workers

On 27 May 2025, the Government of Karnataka promulgated the Karnataka Platform Based Gig Workers (Social Security and Welfare) Ordinance, 2025 (“Karnataka Gig Workers Ordinance”), marking a significant step toward formalizing protections for platform-based gig workers in the state.

This ordinance seeks to create a comprehensive social security and welfare framework tailored to the needs of gig economy workers engaged through digital platforms and aggregators.

Key Highlights of the Karnataka Gig Workers Ordinance

Welfare Fee Imposition

Aggregators and platform companies are required to pay a Welfare Fee ranging between 1% to 5% of the value of each transaction made to a gig worker.

Failure to remit the Welfare Fee will attract an interest penalty of 12% per annum from the due date.

Establishment of a Welfare Board

The ordinance provides for the creation of the Karnataka Platform Based Gig Workers Welfare Board to implement welfare schemes and oversee regulatory compliance.

Creation of a Social Security Fund

The Karnataka Gig Workers' Social Security and Welfare Fund will be constituted from:

1. Contributions by gig workers

2. Amounts collected through the Welfare Fee

3. Grants from the Central and State Governments

4. Donations, gifts, bequests, and other voluntary transfers

Mandatory Registration Requirements

All gig workers in Karnataka must register with the Welfare Board.

Platform companies/aggregators must register themselves and submit worker data within 45 days of the ordinance’s commencement.

Aggregator Obligations for Worker Protection

Contracts with gig workers must be transparent, detailed, and fair, disclosing:

1. Payment structures (piece-rate/time-rate),

2. Deductions, incentives, and

3. Workers' right to refuse assignments.

Any contract modification must be communicated with a minimum of 14 days' prior written notice.

Termination/deactivation clauses must be clearly stated, and any such action must:

1. Be based on valid written reasons,

2. Follow the principles of natural justice, and

3. Be preceded by 14 days' notice (except in cases involving bodily harm).

Why This Matters

With this ordinance, Karnataka becomes a frontrunner in recognizing the rights and vulnerabilities of gig workers within the digital economy. The regulatory framework ensures that the flexibility offered by gig work is complemented by institutional welfare measures and due process protections.

This is a pivotal development for aggregators and digital platforms operating in Karnataka, requiring swift legal and compliance alignment.

Need help navigating the new ordinance or updating platform contracts?

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