Karnataka Gig Workers Bill under scanner as Swiggy, Zepto reach HC: What is the Act? Explained

Several platform aggregators, along with the Internet and Mobile Association of India (IAMAI), have moved the Karnataka High Court challenging the constitutional validity of the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Act, 2025, as well as the rules framed under the legislation.

In their writ petition, IAMAI, Eternal Ltd, Zepto, Swiggy, Urban Company, and Valmo Transportation have also sought to set aside a series of notices issued by the Chief Executive Officer under the Act, according to a report by Bar and Bench.

The notices require platform companies to comply with various statutory obligations, including establishing Internal Dispute Resolution Committees (IDRCs), paying welfare fees, and submitting prescribed information.

What is Karnataka Platform-Based Gig Workers Bill, 2025?

Earlier, in 2025, the Karnataka Legislative Assembly passed the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Bill, 2025, to protect the rights and improve the welfare of workers engaged through digital platforms.

The legislation seeks to establish a formal framework for providing social security benefits and regulating the relationship between gig workers and platform aggregators.

A key feature of the legislation is the establishment of a Welfare Board, which will be responsible for registering gig workers and aggregators, formulating social security schemes, overseeing their implementation, and ensuring effective monitoring of welfare measures.

The Bill also provides for the creation of a Social Security and Welfare Fund to finance these initiatives. The Fund will receive contributions from welfare fees levied on transactions between gig workers and aggregators or on the overall turnover of platform companies, along with financial support from the Central and State governments. Additionally, aggregators will be required to register gig workers, disclose the terms and conditions of work, and explain how automated systems and algorithms influence workers' assignments and employment conditions. Karnataka joins Rajasthan and Bihar, which enacted similar laws in 2023 and 2025, respectively.

How is a gig worker defined?

The Code on Social Security, 2020, defines a gig worker as a person who performs work outside the traditional employer-employee relationship. Gig workers can broadly be divided into platform workers and non-platform workers.

Platform workers obtain assignments through digital platforms and mobile applications such as Ola, Uber, Zomato, Swiggy, and Urban Company. Non-platform gig workers, on the other hand, generally include casual wage workers and self-employed individuals in conventional sectors who work either part-time or full-time without relying on digital platforms.

Rights of platform-based gig workers

A platform-based gig worker shall have the right to:

1. be registered with the Board on being onboarded on any platform, irrespective of the duration of the work, and be provided a Unique ID applicable across all platforms;
2. have access to general and specific social security schemes based on contributions made by them and also the minimum number of transactions or Gig work undertaken by the Gig worker with any aggregator or platform in a quarter as may be notified by the Board; and
3. Access a grievance redressal mechanism as specified in section 22: Provided that, nothing in this Act shall affect any benefit or protection accorded to platform-based gig workers under any other law for the time being in force.

Income security

Where any payment is deducted, the aggregator or platform is required to clearly state the reasons for the deduction in the invoice issued for the work completed by the platform-based gig worker. “Every aggregator or platform shall mandatorily make payout as per the contract and such payment shall be made either daily or weekly or biweekly or monthly payout cycle,” according to the Karnataka government.

It also said that the aggregator or platform must compensate the platform-based gig workers at least on a weekly basis with no delay in disbursal of pay.

Interest and penalties

If any aggregator or platform does not pay the fee required under Section 20 within the prescribed time, it will be required to pay simple interest at 12% per year on the outstanding amount, calculated from the due date until the payment is made.

“Any aggregator or platform who contravenes the provisions of this Act or rules made there under or who fails to comply with the provisions of this Act or anyrules made there under, the State Government may, impose a fine upon an aggregator or platform, which may extend up to Five thousand rupees for the first contravention and up to One lakh rupees for subsequent contravention,” according to the state government.

Rise of gig economy and challenges for workers

The gig economy has emerged as an important contributor to employment generation and economic growth. It has helped India utilise its demographic dividend by creating a significant share of new jobs.

NITI Aayog has projected that the gig economy could generate transactions worth nearly $250 billion by 2030, contributing around 1.25% to India's GDP. The sector has also promoted greater workforce participation among women, youth, and persons with disabilities by offering flexible work arrangements.

Despite benefits, gig workers continue to face several challenges. Most remain outside the formal social security system, with NITI Aayog estimating that more than 82.5% of gig workers are employed informally. Their work often involves health and safety risks, particularly for delivery personnel and transport workers who operate under strict deadlines.

Long working hours are another major concern, with studies indicating that many platform workers work seven days a week and nearly half work for over 12 hours daily. Income instability also remains widespread, with reports suggesting that many gig workers earn below the statutory minimum wage.