In a first for India, Karnataka enforces aggregator welfare fee of 1–1.5% to fund insurance and protections for gig workers
Karnataka Sets Precedent with Gig Workers’ Welfare Board
In a landmark move for India’s gig economy, the Karnataka government has officially constituted a Gig Workers’ Welfare Board aimed at delivering social security benefits to the state’s gig and platform workforce.
The board—established under the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Act, 2025—marks the transition from symbolic recognition to structural support for millions of app-based workers.
“This is a historic and inspiring moment… Karnataka has shown the way,” said Shaik Salauddin, cofounder of IFAT.
But can other states, or the Centre, follow suit with the same urgency?
What the Framework Enforces: Aggregators Must Pay
A cornerstone of the framework is a mandatory welfare fee, compelling all digital platforms operating in Karnataka to contribute 1% to 1.5% of total payments made to gig workers.
- Platforms must register with the Board
- Contributions go into a dedicated welfare fund
- No deductions from gig workers’ earnings
- Used to finance benefits like health insurance, safety nets, and more
This clause is expected to impact the cost structure of quick commerce and mobility platforms—including Swiggy Instamart, Blinkit, and Zepto—who heavily rely on contract workers.
Will platforms pass on this cost, or recalibrate their gig strategies?
Welfare Board Composition & Responsibilities
The 16-member Board, chaired by the state labour minister, includes:
- Government officials
- Gig worker union reps
- Aggregator company representatives
- Experts in labour policy, tech, and data systems
Its mandate? To roll out welfare schemes, manage funds, and ensure compliance with platform obligations. In short, it becomes the administrative backbone of gig welfare in the state.
Can this multi-stakeholder board strike a balance between platform accountability and worker protections?
Next Steps: Registration, Eligibility & Execution
To benefit from the welfare measures, gig workers must register with the board. Detailed rules on eligibility criteria, benefit disbursal, and fund utilisation will be issued in the coming weeks by the state labour department.
Expected social protections include:
- Health insurance coverage
- Emergency support
- Occupational safety schemes
This moves beyond earlier models that treated gig work as casual labour—with no structured safety net.
Broader Context: A Tense Industry at a Tipping Point
The move comes amid escalating tensions between gig workers and platforms, as calls for better conditions grow louder. Just this week, Delhi-based union GIPSWU launched a nationwide online protest, to be followed by physical demonstrations on February 3.
At the national level, the Centre recently proposed that gig workers complete 90 days of work to qualify for employee benefits under the upcoming Social Security Code.
- The Social Security Code was notified in November 2023
- It aims to standardize protections across gig and traditional work models
But legislative intent hasn’t always translated into action—until now.
Can Karnataka’s execution model become a national template?
TL;DR
Karnataka has set up India’s first Gig Workers’ Welfare Board under a 2025 law, mandating digital platforms to contribute 1–1.5% of worker payments to a welfare fund. Contributions won’t be deducted from gig workers’ pay. The board will manage insurance, support, and compliance—paving the way for structured protections amid a strained gig economy.
AI summary
- Karnataka creates 16-member Gig Workers’ Welfare Board
- Platforms must pay 1–1.5% of worker payments to a welfare fund
- Funds to provide health and social security benefits
- Gig workers must register to qualify for coverage
- Move aligns with growing push for formalised gig economy protections
