In today's digital age, convenience is just a tap away. Every time a customer books a cab, orders food online, or schedules a home service through an app, they are interacting with India's expanding gig economy. Behind these services are the gig workers, individuals who undertake short-term, task-based engagements through digital platforms. These are the drivers, delivery partners, repair technicians, and freelancers who play a pivotal role in making everyday life more efficient and convenient.
Platforms such as Uber and Ola have transformed personal mobility, while Swiggy and Zomato have revolutionized food delivery. Similarly, Dunzo facilitates the delivery of groceries and parcels, and Urban Company dispatches professionals for home services. Even white-collar work has entered the gig economy, with platforms like Freelancer connecting individuals to project-based assignments in writing, design, and technology.
For years, gig workers in India have been the backbone of the digital economy. However, despite their contributions, these workers have remained unprotected. They have not been classified as employees and, consequently, have been denied the basic protections and social security benefits that full-time workers enjoy. Lacking formal grievance redressal mechanisms, stable income, and safeguards against arbitrary termination, gig workers have been particularly vulnerable. Aggregators and platforms have often structured contracts in ways that primarily serve their own interests, leaving gig workers exposed to exploitation, inadequate compensation, harsh working conditions, and financial instability.
Recognizing this imbalance, the Government of Karnataka has taken a significant step forward by promulgating the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Ordinance, 2025 ("Ordinance"). The Ordinance represents a formal acknowledgment that while digital platforms have transformed the economy, they cannot do so at the expense of worker rights and dignity.
Historically, gig workers have been subject to unilateral and opaque contractual terms. They have lacked visibility into how their compensation is calculated, what deductions are made, or how performance metrics are assessed. Payment delays and inconsistencies have further contributed to financial stress, and there has been no institutional support in cases of injury, illness, or sudden income loss.
The Ordinance tries to address these challenges through a series of mandatory obligations imposed on platforms and aggregators operating within Karnataka. Key provisions include:
- Mandatory Registration and Disclosure
All platforms and aggregators must register with the state and disclose the list of all gig workers engaged through their platforms. This formal recognition brings visibility to a workforce that has long operated without it. - Fair and Transparent Contracts
Contracts between platforms and gig workers must be transparent, detailing pay rates, deductions, and incentives. Gig workers must also retain the right to decline tasks. Any proposed changes to contract terms must be communicated to the worker at least 14 days in advance, curbing the arbitrary and unilateral policy shifts previously imposed by platforms. - Safeguards Against Unjust Termination
The Ordinance prohibits the removal or deactivation of gig workers without valid written reasons and prior notice. In cases involving serious misconduct, such as bodily harm, immediate suspension is permitted; however, the affected worker retains the right to appeal. - Humanizing the Gig Work Experience
Recognizing the isolating nature of working through faceless digital systems, the Ordinance requires platforms to appoint a dedicated point of contact for gig workers. It also mandates the provision of physical spaces where workers can seek assistance and resolve grievances. - Welfare Fee Contribution
Platforms are now required to contribute between 1% and 5% of each worker's payout towards a Gig Worker's Welfare Fee, ensuring that workers have access to social security benefits. - Payment and Welfare Fee Verification System
(PWFVS)
All payments to gig workers must be recorded within a government-monitored Payment and Welfare Fee Verification System. Non-compliance, including delays or defaults in welfare fee contributions, will attract interest and financial penalties, up to INR 1,00,000 for repeat violations. - Submission of Returns and Regular
Oversight
Additionally, the Ordinance requires platforms to electronically submit quarterly returns to the regulatory board in a prescribed format. The Government retains the discretion to reduce the frequency of these returns through a notification in line with the Ease of Doing Business framework.
In effect, the Ordinance represents more than just a regulatory document. It is a declaration of intent for sure. It signifies a shift from unchecked platform dominance to a more balanced digital economy, where the rights and dignity of gig workers are formally recognized. While the Government of Karnataka has taken a significant step to address the vulnerabilities of gig workers, the actual impact will depend on how these provisions are implemented in practice.
While the Ordinance itself sets out a robust framework, but much will rely on the detailed rules and administrative mechanisms that are yet to be notified. It remains to be seen how these rules will balance the interests of platforms and gig workers, and how effectively they will address the challenges of enforcement, transparency, and accountability in the gig economy. Only time will tell whether the Ordinance will deliver the intended protection for gig workers and bring about the broader transformation it envisions.
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