Karnataka’s Gig Workers Bill: A Groundbreaking Step for Social Security

The Karnataka Assembly has enacted the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Bill, 2025, positioning Karnataka as the first southern state to introduce a dedicated framework for app-based workers. This legislation mandates the establishment of a Gig Workers Welfare Fund, which will be funded through a welfare fee ranging from 1 to 5% on each payment made to gig workers. This fee will be collected by aggregators from every transaction.

Funding Sources for the Gig Workers Welfare Fund

Apart from the imposed welfare fee, the fund will also receive contributions from gig workers, along with grants from both the state and central governments, as highlighted in a legislative brief by PRS Legislative Research.

Management of the Welfare Fund

The bill outlines that a Welfare Board appointed by the state government will administer the fund. The board will consist of government officials, four representatives from both the workers and aggregators, and members of civil society. This board is responsible for managing fund allocations, overseeing worker registration, and handling grievances.

Transparency and Grievance Redressal Mechanisms

The legislation mandates that aggregators enhance transparency by providing workers with clear information regarding fares, earnings, algorithmic monitoring, and customer feedback systems. Additionally, a grievance redressal process is established, commencing with the platform’s Internal Dispute Resolution Committee and progressing to the Board, ultimately leading to an appellate authority.

Current Gig Workforce in Karnataka

Karnataka hosts more than four lakh gig workers. Labour Minister Santosh Lad referenced estimates from NITI Aayog, forecasting that India’s gig workforce could reach 2.35 crore by 2029-30. He noted that many workers often log up to 16 hours a day and remain on standby even during their supposed rest periods.

Implications of the Legislation

While the bill acknowledges the rights of gig workers, it also reveals certain design loopholes. Platforms such as Uber and Ola, which process payments on behalf of customers, will be required to contribute to the welfare fee. In contrast, matching-only platforms like Namma Yatri, which allow payments to go directly to drivers, may not fall under the purview of this payout-based system.