Karnataka Assembly clears gig workers welfare bill, mandates 1–5% welfare fee

The Karnataka Assembly has passed the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Bill, 2025, making it the first southern state to roll out a dedicated law for app-based workers. 

The bill mandates the creation of a Gig Workers Welfare Fund, financed through a welfare fee of 1–5% on each payout to workers, to be collected by aggregators from each transaction. Apart from this levy, the fund will also receive contributions from gig workers themselves, as well as state and central government grants, according to a legislative brief by PRS Legislative Research.

According to the bill, a welfare Board to be appointed by the state government, which comprises government officials, four representatives each of workers and aggregators, and members of civil society, will manage the fund, oversee worker registration, and address grievances.

The bill requires aggregators to bring in transparency by informing workers about fares, earnings, algorithmic monitoring, and customer feedback mechanisms. It also sets up a grievance redressal chain starting with the platform’s Internal Dispute Resolution Committee, escalating to the Board, and eventually to an appellate authority.

Karnataka has more than four lakh gig workers, and Labour Minister Santosh Lad cited NITI Aayog estimates projecting India’s gig workforce at 2.35 crore by 2029–30. He highlighted that many workers log up to 16-hour days and remain on call even during rest hours.

The move recognises gig workers but exposes design gaps. Platforms like Uber and Ola, which route customer payments through themselves, will be obliged to contribute to the levy. But matching-only platforms such as Namma Yatri, where payments go straight to drivers, may escape the net under the payout-based design.