On May 27, 2025, the Karnataka state government passed an ordinance to regulate app based gig work. The Karnataka Platform Based Gig Workers (Social Securities and Welfare) Ordinance, 2025[1] applies to a broad range of digital platform services like ride sharing, food and grocery delivery etc. This Ordinance seeks to establish a legal and social security framework for a rapidly expanding gig economy.
Key features of the Ordinance:
1. Platform and Worker Registration:
Platforms operating in Karnataka must register with a new state welfare board. They also have to enrol every gig worker they engage. The board will issue each worker a unique ID that works across platforms. As per Section 10(4), “The Board shall register and generate a unique ID to every Gig worker who is onboarded by one or more aggregator or platform operating in the State.”
2. Written Agreements:
Platforms must provide every worker with a written contract that clearly states the amount that the worker will earn, the timing and method of payouts, and when platforms can block access. The contract must use simple language and be available in Kannada, English, or any Eighth Schedule language. Section 12(2) of the ordinance states: “All terms of the contracts shall be transparent and comprehensive to the concerned workers and shall comply with fair terms of piece and/or time rate norms including payments, deductions, incentives and calculations of all work done and will explicitly contain the workers right to refuse tasks offered.”
3. Welfare Contributions
Each platform has to pay 1% to 5% of what it pays a worker into a state-run welfare fund. The fund will support social security measures. A government system will track payments and fee contributions. The system is due to launch within six months. Section 20(1) notes: “There shall be charged, from an aggregator or platform, a welfare fee known as the Platform-Based Gig Workers Welfare Fee, which shall be not less than 1% but not more than 5% of the payout.”
4. Disclosing Algorithmic Logic:
Platforms must explain how their systems decide task allocation, pay, ratings, and access. These explanations must be clear and in a language the worker understands. Platforms must also confirm that their systems do not discriminate based on religion, caste, gender, disability, or place of birth. As per Section 13(1), “The aggregator or platform must inform the platform-based gig worker… regarding the procedure to seek information in respect of the automated monitoring and decision making parameters.”
5. Interest and Penalties for Non-Compliance:
The ordinance sets financial consequences for platforms that fail to pay the required welfare fees on time. Aggregators must pay simple interest at 12% per annum on overdue fees from the due date until payment. The state government can impose fines up to Rs 5,000 for a first violation and up to Rs 1 lakh for subsequent violations. Additional penalties and recovery procedures will be prescribed under the rules.
6. Grievance Redressal and Working Conditions:
The ordinance creates a two-tier grievance system for gig workers. Workers can file complaints first with an Internal Dispute Resolution Committee set up by the platform. Platforms must resolve complaints within 14 days and submit an action report. If unresolved, the issue escalates to the Welfare Board, which must issue a final order within 45 days. Workers can also file grievances about social security benefits directly with a grievance officer or Ombudsman appointed by the state. Appeals can be made within 90 days to the Appellate Authority. Platforms must also provide “A safe and hygienic working environment, including reasonable access to rest breaks and sanitation facilities.”
7. Establishment and Role of the Karnataka Gig Workers Welfare Board:
Section 3 of the ordinance states that the State government will establish the Platform-Based Gig Workers Welfare Board to implement the gig workers’ welfare law. The Board will begin functioning on a date notified by the government and will be headquartered in Bengaluru. It will operate as a corporate body, able to hold property, enter contracts, and sue or be sued.
8. Composition of the Board:
Section 4 provides for the composition of this board which shall include:
- The Labour Minister as Chairperson.
- Senior officials from Labour, IT, and Commercial Taxes Departments or their nominees.
- A Chief Executive Officer appointed by the government to manage daily operations.
- Four representatives each from gig worker groups and platform aggregators, nominated by the government.
- Two civil society experts with gig economy experience.
- Technical experts may be invited when needed.
Decisions require a majority vote. The Chairperson has a casting vote if needed. Meetings require at least 50% of members for quorum as per the ordinance.
9. Powers and Functions of the Board:
Section 6 of the Ordinance states that the board shall be responsible for carrying out the following powers and functions:
- Register gig workers and platforms as per the ordinance.
- Ensure the registration of aggregator/ platform operating in the state in accordance with the ordinance
- Set up a monitoring mechanism to certify that welfare fee is being collected.
- Ensure Implementation of general and specific social security schemes based on contributions made, as may be notified by the State Government and disburse the social security benefits through the individual social security accounts linked to the Unique IDs allocated to platform based Gig workers.
- Monitor the schemes for social security of registered platform based Gig workers and provide recommendations to the State Government for administering such schemes;
- Ensure that Gig workers have access to the benefits as per the schemes formulated by the State Government and to provide proactive facilitation to them in their engagement with concerned aggregator or platform; and also, to weigh the social security schemes extended by the aggregator or platform and take appropriate measures.
- Engage with workers associations working with Gig workers and hold regular open consultations with them;
- Constitute a committee for providing the recommendations to the State Government for formulation, review and implementation of the schemes;
- Make social security schemes for specific groups of Gig workers such as women, persons with disabilities etc.; and
- Seek aggregated data from the aggregator and platform on the work done via their platform.
Conclusion:
The promulgation of the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Ordinance, 2025 follows on from the state governments decision to introduce the Karnataka Platform Based Gig Workers (Social Security and Welfare) Bill, 2024. The ordinance marks a significant step towards improving the working conditions, social security, and legal protections for the rapidly growing segment of gig workers in the state of Karnataka. The ordinance, issued under Article 213(1) of the Constitution, addresses the urgent need for a structured social security and welfare framework for gig workers i.e. individuals who earn livelihood through digital platforms, including ride-hailing, food delivery, freelance services, and e-commerce logistics.
[1]Karnataka Ordinance No.04 of 2025, The Karnataka Platform Based Gig Workers (Social Security and Welfare) Ordinance, 2025; https://erajyapatra.karnataka.gov.in/WriteReadData/2025/8625.pdf