Karnataka Government Implements Welfare Fee for Gig Workers
The Karnataka government is set to introduce a welfare fee applicable to ecommerce and app-based service platforms, aimed at financing social security provisions for gig workers under the Karnataka Platform-based Gig Workers (Social Security & Welfare) Act, 2025, as reported by officials to The Times of India.
This initiative mandates that platform operators contribute a fee amounting to 1 per cent of their commission revenues, with limits determined by their business models. To alleviate the burden on smaller entities, the state has established a per-transaction cap of 50 paise, 75 paise, or Re 1.
The accrued funds will be allocated to a specially designated Gig Workers Welfare Fund, which will fall under the supervision of a 16-member Gig Workers Welfare Board, headed by the state’s labour minister. A formal announcement delineating the fee structure and regulatory obligations is slated for release imminently.
Government projections suggest that this levy could yield between Rs 250 crore and Rs 300 crore on an annual basis. Aggregators will be responsible for remitting the welfare fee weekly to a designated bank account overseen by the board.
To facilitate implementation, the labour department is constructing a digital infrastructure to monitor payments and authenticate welfare contributions.
Collaborations are underway with the International Institute of Information Technology, Bangalore (IIIT-B), and the Azim Premji Foundation to develop software for both fee collection and oversight.
Karnataka is home to numerous prominent app-based service providers in sectors such as ecommerce, logistics, ride-hailing, and food delivery, collectively employing thousands of gig workers.
Companies operating within the state will also be obliged to furnish worker data to the welfare board to streamline the enrollment and distribution of social security benefits.
The labour minister is anticipated to convene the inaugural meeting of the welfare board in the near future, with aspirations to operationalise the fund by the conclusion of August.
Officials estimate that Bengaluru alone is host to approximately 2.75 lakh gig workers, while the overall figure for platform-dependent workers across Karnataka is nearing five lakh.
The welfare initiative is expected to encompass workers from various sectors, including ride-hailing, ecommerce, food delivery, and logistics.
Karnataka stands as the first state in India to formalise a comprehensive welfare framework for gig workers through legislative means. This policy structure emerged following extensive consultations involving state leaders and senior party officials prior to the law’s enactment.
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