India’s platform economy has witnessed a major rise over the past decade, propelled by digital transformation and the rapid proliferation of mobile-based services. Gig workers, who form the backbone of this economy, have become indispensable to urban lifestyles, delivering food, ferrying passengers, offering logistics support, and providing on-demand services ranging from housekeeping to healthcare. However, despite their contributions, these workers have historically operated in a regulatory vacuum. Karnataka, a hub of India’s technology-driven economy, appears to be the first state to introduce a comprehensive ordinance specifically aimed at protecting gig and platform workers.

This article delves into the provisions of the Karnataka Platform Based Gig Workers (Social Security & Welfare) Ordinance, 2025 (the “Ordinance”)

1. Contextualising the Gig Economy

The “gig economy” refers to a labour market characterised by short-term contracts or freelance work, as opposed to permanent jobs. Gig workers operate as independent contractors, often relying on digital platforms to access work opportunities. These arrangements offer flexibility, but at the cost of job security, social protections, and bargaining power.

2. Who does this Act Apply to?

The Ordinance aims to cover every platform and gig worker as defined under the ordinance. The Ordinance is specifically applicable apply to every aggregator or platform, operating or providing the following services¹:

1. Ride Sharing,
2. Food & Grocery Delivery,
3. Logistics,
4. E-Market Place (B2C & B2B),
5. Professional Activity Provider
6. Healthcare,
7. Travel & Hospitality,
8. Content & Media Services.

3. Key Definitions

The ordinance begins by laying out definitions that delineate its scope and the actors it seeks to regulate.

Term	Definition
Gig Worker	A person who performs work on a temporary, flexible basis for a given rate of payment or piece-rate work and is sourced through a platform. 2
Platform	A digital or electronic interface that facilitates the exchange of goods or services between users and service providers at a certain location, in return for payment, involving a decision-making system relying on data (automated).3
Aggregator	It refers to a digital intermediary which connects a buyer of any goods or service to the seller of any goods or service. It includes any entity that coordinates with one or more aggregators.4
Payout	It refers to any final payments made by an aggregator or any platform.5
Terminate	It relates to restricting a platform-based gig worker, including but not limited to blocking worker access and making the worker ineligible, irrespective of the duration of work.6
Board	Karnataka platform based Gig Workers Welfare Board established under section 37

It may be observed that the Ordinance excludes voluntary work, family businesses, and B2B contracts where the platform does not intervene in the allocation of work.

4. Rights Of Platform Based Gig Worker:

Platform based Gig workers have been given the following rights

1. To be registered with the Board on being onboarded on any platform, irrespective of the duration of the work, and be provided a Unique ID applicable across all platforms; (
2. To have access to general and specific social security schemes based on contributions made by them and also the minimum number of transactions or Gig work undertaken by the Gig worker with any aggregator or platform in a quarter as may be notified by the Board
3. To access a grievance redressal mechanism⁸

5. Registration & Onboarding Requirements

To promote transparency and regulation, the ordinance mandates registration of both platforms and gig workers under Sections 10 & 11 of the Ordinance:

Category	Requirement
Platforms/ Aggregators	Mandatory registration with the Board within 45 days of the commencement of the Ordinance9
Gig Workers	Aggregators must provide the Board with data on all the gig workers engaged through their platforms within 45 days; all gig workers to be electronically registered with the board within 30 days of being onboarded by the platform; they should also be assigned a Unique ID, which is to remain valid irrespective of duration and nature of engagement with the platform.10

6. Obligation to enter into Fair Contracts

Section 12 of the ordinance states that the Aggregators and Platforms shall comply with the terms of the piece and/or time rate, and the contract shall also include the worker’s right to refuse. Further, any change in terms of the contract should be informed to the workers within 14 days. Further, all contracts should be transparent and comprehensive written in simple language and be easily comprehensible. The contract should be available in all languages listed under the 8th schedule.

7. Termination of Work

Section 14 of the ordinance talks about the termination of work. The contract shall include an exhaustive list of grounds for termination of the contract by the aggregator or deactivation by the gig worker. The ordinance specifies that no termination shall take place without giving a valid reason in writing or without a prior notice of 14 days. Cases where ground of suspension include bodily harm are exceptions the aforementioned rule and the Gig worker may eb terminated immediately in such cases.

8. Income Security & Working Conditions

Section 15 of the ordinance deals with Income Security and states that any deductions by the aggregators are to be mentioned in the invoice for the work performed.

It also mentions that the gig workers must be compensated at least on a weekly basis, with no delay.

Section 16 of the ordinance mentions that the aggregator must provide, as far as reasonably possible, a safe and healthy working environment with adequate rest during the workday and access to sanitary and rest facilities.

9. Gig Workers Welfare Fee

The Ordinance provides for the establishment of the Karnataka Platform-Based Gig Workers Social Security and Welfare Fund to support registered gig workers.

This Fund will be financed through a welfare fee ranging from 1% to 5% levied on aggregators or platforms, with the exact rate to be notified by the state government. The fee may be based on each transaction’s worker pay out or the aggregator’s annual state-specific turnover.

In addition to aggregator contributions, the Fund will receive inputs from gig workers, state government grants, and other notified sources. A dedicated Payment and Welfare Fee Verification System (PWFVS) will oversee fee collection, tracking, and disclosures, ensuring compliance with applicable data protection laws. The Telangana Draft Bill goes further to penalise any failure to pay the welfare fund fee with 1 year imprisonment + fine.¹¹

10. Dispute Resolution & Regulatory Oversight

The law proposes a dual structure for conflict resolution:

1. Every platform must host a worker-facing interface to address complaints within 14 days and issue a written action-taken report, and within 45 days to dispose of the complaint. If the worker is unsatisfied, the same is forwarded to the board. Further any appeals against the decision can be filed within 90 days.

2. The Board: A quasi-judicial state body empowered to hear unresolved grievances, order compensation, and penalise non-compliance.

The Board also maintains annual audit reports, recommending legislative amendments based on data analytics and field feedback.

11. State-Wise Comparison

The Ordinance is the latest attempt from an Indian State to regulate the gig workers. Rajasthan has already passed legislation i.e. Rajasthan Platform-Based Gig Workers (Registration and Welfare) Act, 2023. Meanwhile Telangana with the Draft Telangana Gig and Platform Workers (Registration, Social Security, and Welfare) Bill, 2025 and Jharkhand with the Jharkhand Platform Based Gig Workers (Registration And Welfare) Bill, 2024 have both floated bills on the same subject matter. We have prepared a comparative analysis between the various legislations which reads as follows:

Feature	Karnataka Ordinance	Telangana Draft Bill	Jharkhand Draft Bill	Rajasthan Act
Definition of Gig Worker	Works or participates in a work arrangement that results in a given rate of payment, based on terms and conditions laid down in such contract and includes all piece-rate work, and whose work is sourced through a platform.	Work arrangement falling outside the traditional employer-employee relationship.	Work falls outside the traditional employer-employee relationship, obtained through an online platform, contractual, and piece-rate.	Same as Jharkhand
Definition of Platform Worker	Has not distinguished between a gig worker and platform worker	Persons obtaining work through an online platform.	Same as Karnataka	Same as Karnataka
Rights of a Gig Worker	Registration, social security schemes, and grievance redressal mechanisms. Provided a Unique ID	Registration, social security schemes, and grievance redressal mechanisms. Provided a Unique ID	Same as Karnataka	Registration, social security schemes, grievance redressal mechanism, participation in board discussions
Registration of Gig workers	Workers must be registered by aggregators within 45 days from commencement of the Act.	Self-registration as prescribed. Aggregators to provide database of workers registered with them within 60 days from commencement of the Act	Same as Karnataka	Same as Karnataka.
Registration of aggregators	Aggregators must register with the board within 45 days from commencement of the Act	Aggregators must register with the board within 45 days from the commencement of the Act	Same as Karnataka	Same as Karnataka.
Transparency in Algorithm	Aggregators must inform the platform and gig workers about the procedure to seek information on the automated monitoring and decision-making system that affects their work, which has an impact on their working conditions	Aggregators must inform the platform and gig workers about the procedure to seek information on the automated monitoring and decision-making system that affects their work.	Same as Karnataka	No provision for transparency in automated monitoring and decision-making systems.
Termination of Work	Reasons must be included in the contract, and a 14-day prior notice. Worker possesses the right to appeal	Reason for termination must be given in writing, with a seven-day prior notice.	Same as Karnataka	No provision for termination of work.
Grievance Redressal	Grievances can be filed via a portal or with an officer to be completed within 14 days. Appeals within 90 days.	Grievances can be filed via a portal or through an officer. Order within 30 days.	Same as Karnataka	Same as Karnataka.
Welfare Fee	1-5% of the payout to the platform-based Gig worker in each transaction	Between 1-2% of the individual payout to the gig and platform worker, paid by the aggregator quarterly.	Percentage of transaction value, as specified by the state government.	Same as Jharkhand.
Sources of Fund	Welfare fee, contributions by platform-based gig workers, grants-in-aid from both Central and State Government, grants, bequests or transfers and other sources.	Welfare fund fee, contributions by platform and gig workers, grants-in-aid from the centre and state government, CSR fund, grants, gifts, or donations	Same as Karnataka.	Welfare fee, grants-in-aid from the State Government, and any other sources.
Usage of funds	Prescribed by the state government	Not specified	Prescribed by the state government	Prescribed by the state government

Conclusion

The Ordinance is a statement of intent: to bring much need regulation to the Indian gig economy. It brings important conversations regarding the balance between flexibility and dignity of gig workers. By institutionalising social protections, transparency, and grievance redressal, Karnataka offers a model for progressive digital labour governance.

The Ordinance not only acts as a required move for the gig workers but also recognises the recent challenges to health and safety that gig workers have faced. The ordinance’s inclusion of the IDRC is a hailed step, similar to the SEBI & NCH Portal, providing the workers with a specialised committee to deal with the issues and disputes in a seamless and time-bound manner.

It can also be expected that other states will soon follow suit and the impact that such sweeping regulations will have on the previously unregulated gig economy remains to be seen.

Written By: Aaryaan Sadanand (Senior Associate) and Shobit Goel (Intern)

1 Section 1(3) of the Karnataka Platform Based Gig Workers (Social Security & Welfare) Ordinance, 2025

2 Section 2(e) of the Karnataka Platform Based Gig Workers (Social Security & Welfare) Ordinance, 2025

3 Section 2(g) of the Karnataka Platform Based Gig Workers (Social Security & Welfare) Ordinance, 2025

4 Section 2(b) of the Karnataka Platform Based Gig Workers (Social Security & Welfare) Ordinance, 2025

5 Section 2(f) of the Karnataka Platform Based Gig Workers (Social Security & Welfare) Ordinance, 2025

6 Section 2(o) of the Karnataka Platform Based Gig Workers (Social Security & Welfare) Ordinance, 2025

7 Section 2(c) of the Karnataka Platform Based Gig Workers (Social Security & Welfare) Ordinance, 2025

8 Section 7 of the Karnataka Platform Based Gig Workers (Social Security & Welfare) Ordinance, 2025

9 Section 11 of the Karnataka Platform Based Gig Workers (Social Security & Welfare) Ordinance, 2025

10 Section 10 of the Karnataka Platform Based Gig Workers (Social Security & Welfare) Ordinance, 2025

11 Section 20 of the Karnataka Platform Based Gig Workers (Social Security & Welfare) Ordinance, 2025