Karnataka Gig Workers Welfare Ordinance 2025

Introduction:

In a landmark move, the Karnataka government enacted the Platform-Based Gig Workers (Social Security and Welfare) Ordinance, 2025, establishing a comprehensive welfare framework for gig and platform workers. The ordinance seeks to formalize the gig economy by introducing mandatory registration, social security benefits, and a grievance redressal mechanism for all gig workers operating within the state. For employers, this legislation represents both an opportunity and a responsibility to align operations with regulatory requirements while supporting worker welfare.

Mandatory Registration and Welfare Contributions

Under the ordinance, all platform aggregators are required to register with the Karnataka Gig Workers Welfare Board within 45 days of the law’s commencement. In addition, platforms must remit a welfare fee ranging from 1% to 5% of each transaction involving gig workers. The collected funds will be directed into the Karnataka Gig Workers Social Security and Welfare Fund, which is intended to finance social security schemes, welfare programs, and other benefits for gig workers. Notably, only up to 5% of the fund can be used for administrative purposes, ensuring that the majority of resources directly benefit the workers.

Key Rights and Protections for Gig Workers

The Act guarantees several rights for gig workers, including registration and issuance of a unique ID, access to social security benefits, and protection under transparent contractual terms. It also establishes internal grievance redressal mechanisms within platforms, with escalation options to the Welfare Board. Platforms are further required to maintain algorithmic transparency and ensure occupational health and safety standards, contributing to a safer and fairer working environment.

Employer Obligations and Compliance Requirements

From an employer perspective, the ordinance necessitates immediate operational adjustments. Platforms must ensure timely registration, integrate systems to calculate and remit the welfare fee accurately, and update contracts with gig workers to comply with the Act’s provisions. Non-compliance can attract penalties, including fines and interest on overdue fees, making adherence to the ordinance critical for legal and reputational risk management.

Opportunities for Platforms and Aggregators

At the same time, the ordinance presents strategic opportunities for employers. By providing structured social security and welfare benefits, platforms can enhance worker satisfaction, reduce turnover, and foster a more stable gig workforce. Proactively educating gig workers about their rights and the benefits available under the law can help build trust and improve engagement.

Conclusion: Building a Fair and Sustainable Gig Economy

Overall, the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Ordinance, 2025, establishes a framework that balances regulatory compliance with worker welfare. Employers who align their operations with these provisions can not only avoid legal repercussions but also strengthen their workforce strategy, contributing to a more equitable and sustainable gig economy in the state.