Employment and Labour Law Update – A New Social Contract: Karnataka’s Ordinance on Platform-Based Gig Workers, 2025

Introduction

The emergence of platform-based gig work has redefined labor markets across India, particularly in metropolitan and tier-two cities. From ride-hailing to food delivery, from domestic services to logistics, a silent workforce—millions of gig workers—powers India’s consumer tech economy. Yet, these workers often fall outside traditional labor protections. Addressing this glaring gap, the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Ordinance, 2025 represents a landmark move by a State government to offer social protection to these informal workers. This essay analyses the Ordinance line by line, offering insights into its legislative architecture, significance, and transformative potential.

Preamble and Legislative Intent

The Ordinance opens by acknowledging the necessity to provide a comprehensive welfare mechanism for gig workers, recognizing their contribution to the digital economy. It cites the urgent need to regulate and secure the interests of platform-based gig workers, primarily those working without fixed employer-employee relationships.

The State Government justifies invoking its powers under Article 213 of the Constitution of India to promulgate an Ordinance in the absence of immediate legislative action. This preamble establishes both a welfare-centric intent and the constitutional basis for the Ordinance.

Chapter I – Preliminary

Section 1: Short Title, Extent and Commencement

The legislation is titled The Karnataka Platform-Based Gig Workers (Social Security and Welfare) Ordinance, 2025, extending to the whole State of Karnataka. It comes into force on a date notified by the Government.

Section 2: Definitions

This section lays the definitional groundwork:

• Aggregator or Platform: An entity using a digital platform to connect consumers with gig workers.
• Gig Worker: A person performing work on a task-based arrangement through a platform for remuneration.
• Board: Refers to the Gig Workers Welfare Board constituted under this Ordinance.
• Welfare Fund: A dedicated fund created to finance gig workers’ social security and welfare measures.

The clarity and breadth of definitions indicate an inclusive and expansive approach, aiming to cover a wide spectrum of digital platforms and task-based services.

Chapter II – Welfare Board and Fund

Section 3: Establishment of the Gig Workers Welfare Board

The Ordinance mandates the establishment of a Platform-Based Gig Workers Welfare Board. This Board will be the implementing authority for all welfare-related decisions. Its composition includes:

• Representatives of gig workers,
• Representatives of aggregators,
• State government officials,
• Independent experts in labor and social welfare.

This tripartite structure reflects a democratic and multi-stakeholder approach to governance.

Section 4: Powers and Functions of the Board

The Board’s functions include:

• Registration of gig workers and platforms,
• Management and disbursal from the Welfare Fund,
• Framing of welfare schemes including insurance, maternity benefits, pensions, etc.,
• Monitoring compliance by platforms,
• Issuing advisories and recommending amendments.

The Ordinance empowers the Board to act as both regulator and facilitator, offering flexibility to adapt to evolving platform work dynamics.

Section 5: Welfare Fund

The creation of a Gig Workers Welfare Fund is one of the most crucial provisions. It will be financed by:

• A fixed percentage of the transaction value contributed by platforms,
• Grants from the State Government,
• Donations and penalties.

This is a structural innovation, moving away from tax-based funding to a contributory model with private platform participation.

Chapter III – Registration and Compliance

Section 6: Registration of Gig Workers

Every platform-based gig worker in Karnataka must register with the Board. The registration entitles them to access welfare benefits.

Section 7: Obligations of Aggregators

All platform companies must:

• Register themselves with the Board,
• Share data related to transactions and gig workers,
• Make periodic contributions to the Welfare Fund.

These obligations place a compliance burden on aggregators but are critical to institutionalizing accountability and data-driven policymaking.

Chapter IV – Welfare Measures

Section 8: Welfare Schemes

The Board, with government approval, may frame schemes for:

• Health and life insurance,
• Maternity and disability benefits,
• Education for children,
• Retirement support,
• Skill training and upskilling.

These schemes align with the principles of universal social protection under ILO conventions, and if implemented well, could become a national benchmark.

Chapter V – Penalties and Enforcement

Section 9: Offences and Penalties

Non-compliance by aggregators—such as failure to register or contribute—may attract penalties including fines, disqualification from operating in Karnataka, or other prescribed action.

This section is vital for enforcement and deterring non-cooperation from platform companies.

Chapter VI – Miscellaneous

Section 10: Delegated Legislation

The State Government has the power to make rules to implement the Ordinance. This includes fixing contribution rates, timelines for compliance, and details of schemes.

The flexible rule-making power allows future-proofing and adaptability.

Conclusion

The Karnataka Platform-Based Gig Workers (Social Security and Welfare) Ordinance, 2025 is a transformative and timely intervention in India’s labor law framework. It fills a regulatory vacuum by institutionalizing the rights and protections of gig workers in an increasingly digitized economy. Through the establishment of a statutory Welfare Board, registration mechanisms, contributory funding, and expansive social schemes, it provides a model that other States—and potentially the Centre—can emulate.

The success of this Ordinance will depend on stakeholder cooperation, transparency in fund management, and effective enforcement. However, as a legislative prototype, it marks a new chapter in India’s approach to labor welfare and sets the foundation for a more equitable future of work.

Co Authored by – Rohitaashv