Imagine reclining on your couch, tapping an app to order dinner, or transforming your living room into a home office and logging on whenever it suits you. The gig economy has ushered in unparalleled freedom—choose your hours, your clients, even your workspace. But behind that glossy veneer lies a harsh reality.
For most full‑time employees—in sectors from finance to manufacturing—their employer provides a safety net: health insurance, paid vacation and sick leave, unemployment protection, retirement contributions and workers' compensation. Gig and platform workers, classified as independent contractors, usually forfeitall ofthese protections. A flat tire on a delivery run, a sick day without pay or a sudden downturn in ride‑hail demand can translate directly into lost income and uncovered expenses.
This vulnerability is most acute in industries where on‑demand work has exploded: food and grocery delivery, ride‑hailing, last‑mile logisticsand courier services. But it'salso spreading to temporary healthcare staffing, short‑term hospitality roles and freelance media projects. In each case, workers are paid per task or delivery, with earnings that rise and fall according to the day's orders. For a high‑earning consultant, going without employer benefits might feel like a reasonable trade‑off. For the majority of gig workers, though, "flexibility" often means unpredictable pay checks and no safety net when illness or injury strikes.
Crafting a Safety Net
Recognising this growing disparity, policymakers are grappling with how to extend social protections to this workforce. Attempts to create targeted welfare funds aren'tentirely new in India, with precedents providing specific benefits in sectors like construction. Now, the state of Telangana is proposing a more comprehensive approach, signalling a potentially significant shift in how gig and platform work is regulated.
New platform gig-worker law in Telangana
A new draft law, potentially titled the Telangana Gig and Platform Workers Act, 2025("Act"), aims to establisha formal framework providing social security, fair working conditions, and official recognition for the thousands engaged by digital platforms operating within the state.
Who Would Be Covered?
The draft law casts a wide net. It applies to anyone in Telangana who performs work through digital platforms outside a traditional employment relationship—whether you'redelivering meals, driving passengers, carrying packages, staffing a wardfor the dayor freelancing on a media assignment. Platforms themselves—from ride‑sharing apps and grocery‑delivery services to online marketplaces and healthcare‑staffing portals—would also be subject to the law, even if headquartered elsewhere.
The proposed law casts a wide net across Telangana, targeting specific groups:
- Gig and Platform Workers:Individuals performing work or services via digital platforms, outside a traditional employment relationship, often on task-based contracts. Registration with a new state Welfare Board would be key to accessing benefits.
- Aggregators and Platforms:The digital intermediaries connecting users with service providers. This includes platforms operatingwithin Telangana (even if headquartered elsewhere),facilitatingeverything from ride-sharing, food and grocery delivery, logistics, and e-commerce, to professional services, healthcare, travel, hospitality, and content creation.
- Primary Employers:Entities directly engaging gig workers for specific tasks against payment.
- /ul>
What Could Change for Workers?
If enacted, this legislation promises significant improvements for registered workers:
- Social Security: Registered workers contribute to—and draw benefits from—a dedicated welfare fund covering essentials like health insurance, pension credits and injury compensation.
- Formal Recognition: Mandatory registration would provide workers with a Unique ID, acknowledging their status across different platforms.
- Fair Pay Practices: Platforms would need to clearly justify any deductions from earnings, ensure timely payouts according to contract sand guarantee minimum earnings thresholds.
- Protection Against Arbitrary Termination: Workers generally couldn't be removed from a platform without valid written reasons and fair notice, except in cases posing an immediate threat.
- Algorithmic Transparency: Workers gain the right to understand how platform algorithms affect their work, earnings, and ratings, explained in a language they understand, with safeguards against discrimination.
- Safety Standards: Platforms must take reasonable steps to protect worker health and adhere to basic occupational health norms.
- Grievance & Dispute Resolution: A two‑tier mechanism offers initial recourse through a Grievance Officer and appeals to a deputy-commissioner-level–level authority. Platforms with 100+ registered workers must also form internal dispute committees for contract or payment issues.
New Responsibilities for Platforms
Companies operating these platforms face significant new obligations:
- Mandatory Registration: Platforms meeting the criteria must register with the Welfare Board.
- Welfare Contribution: A key element is a mandatory levy, potentially 1-2% of the payout per transaction, payable quarterly by the platform to the government. This directly finances the worker Welfare Fund.They must register with the Welfare Board within 45 days of the law's enactment, share and quarterlyupdate worker rosters, maintaintransparent records, and designatea worker‑relations officer. Non‑compliance can trigger fines, interest on late payments or even imprisonment in severe cases.
- Data Sharing & Compliance: Platforms must share worker data with the Board, implement fair termination and payout processes, ensure safety standards, be transparent about algorithms, and facilitategrievance redressal.
- Record Keeping: Maintainingproper accounts and submittingregular reports related to workers and welfare contributions will be required.
What does it mean for Consumers?
Platforms may pass some of the new levies on to users, potentially nudging up the cost of a ride, a meal deliveryor a courier service. Advocates for the law would argue that better‑protected workers will deliver more reliable service, and that a modest price increase is a fair trade for basic worker dignity.
Impact on Specific Sectors:
The law's reach into specific industries like the prominent software services sector hinges on the business model employed. Traditional software companies, which develop products or provide services using their own direct employees under standard employment contracts, would generally falloutside the scope of this legislation concerning those employees. The Act's focus is primarily on regulating the relationship between platforms, gig workers, and consumers, not conventional employer-employee arrangements. However, platforms whose core function is to connect clients with freelance software professionals (operatingas independent gig workers) could very well be covered, potentially classifying them as intermediaries for professional services. If so, these platforms would face the Act's obligations like registration and welfare contributions, and the freelance professionals using them would be eligible for the associated benefits.
Looking Ahead
The bill must clear the Telangana Legislature and await government notification of when each provision takes effect. Once enacted, the state will establishits Welfare Board, craft detailed implementation rules and begin registering workers. As Telangana pioneers this approach, other Indian states—and perhaps nationalpolicymakers—will watch closely to see whether portable benefits and enhanced transparency can reshape an industry built on flexibility.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
