Karnataka notifies platform-based gig workers welfare law

Introduction:

In a ground-breaking move for India’s gig economy, the Karnataka government has notified the Platform-Based Gig Workers (Social Security and Welfare) Act, 2025, becoming the first state to introduce a dedicated social security framework for gig workers. The law represents a significant milestone in formalizing protections for workers who power sectors like ride-sharing, food and grocery delivery, logistics, e-marketplaces, healthcare, travel, and professional services.

Welfare Board and Social Security Fund

At the heart of the Act is the creation of a Welfare Board and a Social Security and Welfare Fund, financed through a modest welfare fee of 1–5% of each transaction pay out, payable by aggregators. This ensures a steady, dedicated fund to provide social security benefits for gig workers.

Each worker will be electronically registered and issued a Unique ID, which is portable across platforms, allowing seamless access to benefits even when switching between jobs or companies. Aggregators are mandated to register with the Board within 45 days, ensuring that the system is inclusive and comprehensive from the outset.

Regulatory Obligations for Aggregators

The law introduces a new level of accountability and transparency for platforms. Aggregators must now disclose automated decision-making systems, maintain clear and fair contracts, implement grievance redressal mechanisms, and strictly comply with the fee contribution obligations. While these measures enhance responsibilities for platforms, they also provide regulatory clarity, creating a predictable and structured environment in which gig workers’ rights are recognized and safeguarded.

Impact on Gig Workers and Platforms

For gig workers, this legislation offers more than just financial protection it provides recognition, access to welfare benefits, and a stronger voice in the rapidly growing platform economy. For employers and platforms, it is a balancing act: while compliance requirements are stringent, the law offers operational certainty and a framework that legitimizes gig work as a structured and protected form of employment.

Significance and Broader Implications

With this Act, Karnataka sets a pioneering example for other states, demonstrating how social security and labour protections can be extended to modern, platform-based workforces. It signals a transformative approach to India’s gig economy one where flexibility and innovation coexist with protection and fairness for workers.