Introducing the Karnataka Gig Workers Social Security Ordinance

– Dr Basavaraju R Shreshta and Mr Athreya Hebbar

The Karnataka cabinet has cleared the much awaited Karnataka Platform-based Gig Workers (Social Security and Welfare) Bill, 2024, promulgated as an ordinance to establish a legal and regulatory framework to govern the welfare of platform-based gig workers in the state. The ordinance outlines compulsory obligations for aggregators to ensure social security, occupational health and safety, operational transparency, and structured grievance redressal. Karnataka will become the second state in the country after Rajasthan to introduce a legislation for the welfare of the platform-based gig workers. The Bill has taken the ordinance route as the assembly was not in session and will be tabled in the upcoming monsoon session. 

Welfare Board

A key provision in the ordinance is the formation of the Karnataka Platform Based Gig Workers Welfare Board, headquartered in Bengaluru. This Board will act as the primary body for the implementation of state-led social security schemes. It will be empowered to hold property, enter contracts, resolve disputes, and maintain a state-wide digital database of registered gig workers and aggregators. Each worker will be assigned a unique identification number, and all contracts between workers and aggregators will be tracked and recorded.

Registration of Gig Workers and Aggregators

The ordinance mandates compulsory registration of aggregators within 45 days from the establishment of the Board, with a single registration sufficing for any legal entity operating multiple platforms. If a new platform is launched or brought under an entity’s operation, the Board must be notified within 60 working days. Aggregators are also responsible for the registration of gig workers who have been engaged for at least 90 days and completed at least one assignment within 30 days of the Board’s constitution. Additionally, they must report any changes in workforce numbers on the state’s designated portal on a quarterly basis. In cases of challenges in registering the aggregators and gig workers, the aggregators must provide a formal justification and may request an extension of up to 60 days to complete the process. 

Welfare Fund and Welfare Fee

To finance welfare initiatives, the ordinance provides for the creation of the Karnataka Gig Workers’ Social Security and Welfare Fund. This fund will be supported by a Welfare Fee ranging between 1% and 5% of each payout made by aggregators to gig workers, as notified by the state government. Aggregators must calculate and self-declare this fee within 30 working days from each quarter’s end, using a standard format. Refunds for excess contributions must be claimed within 90 days.

The fund may also receive contributions from other sources, including voluntary contributions from aggregators. These will qualify as Corporate Social Responsibility (CSR) under clause (5), sub-clause (1) of section (19) of the relevant Act, and are eligible for tax deductions under the Income Tax Act, 1961. Utilisation of the fund will be determined by the Board in consultation with the state government. However, the draft does not specify the schemes to be implemented under this fund.

Payment Verification and Transparency

The ordinance proposes a Payment and Welfare Fee Verification System (PWFVS) to digitally track all payments made to gig workers and ensure accurate welfare fee contributions. This system will be administered by the state government and monitored by the Board.

Aggregators must provide gig workers access to information related to earnings, fare calculations, and customer feedback. However, disclosure of confidential details such as source code, algorithms, operational logic, system architecture or technical designs is not necessary and remains outside the scope of access for the gig workers. Only workers who have completed 90 days of engagement and have completed at least one assignment with the aggregator are eligible to access such non-confidential information.

Quarterly Reporting and Compliance

Aggregators must submit electronically readable quarterly reports via the state portal within 30 days of the end of each quarter. These reports should include platform activity and gig worker-related data.

Worker Protections and Grievance Redressal

The ordinance mandates a minimum of 14 days’ notice for termination of the gig worker by aggregators. Contracts must be fair and transparent. A two-tier grievance redressal mechanism will be established: first, through an internal dispute resolution committee at the aggregator level, and second, through the Welfare Board for unresolved cases.

Enforcement and Public Consultation

The Karnataka Platform Based Gig Workers Welfare Board, under the Ministry of Labour, will be responsible for implementation, registration, fund management, and compliance monitoring.

The draft ordinance is open for public consultation. Stakeholders may submit objections, suggestions, and feedback within 30 days of its publication in the Official Gazette. Submissions should be addressed to the Secretary to Government, Labour Department, Vikasa Soudha, Dr. B.R. Ambedkar Veedhi, Bengaluru.

The ordinance applies to all platform-based gig workers and aggregators operating in Karnataka, and it intends to formalise protections and welfare mechanisms within the state’s platform economy.

(Dr Basavaraju R Shreshta is the Executive Director of Grassroots Research And Advocacy Movement, having a deep understanding of Skill Development and Employment ecosystem of Karnataka, having worked at the grassroots and authored policies and vision documents. 

Mr Athreya T Hebbar is from Gokhale Institute of Politics and Economics pursuing MSc Economics(Public Policy) and currently interning at GRAAM)