At a glance
- Karnataka has introduced a new ordinance to provide social security and welfare benefits to platform-based gig workers.
- This makes Karnataka the second state in India, after Rajasthan, to formalise protections for gig economy workers.
- Employers should prepare for compliance by updating contracts, HR systems, and data governance practices.
Karnataka has introduced a new ordinance to provide social security and welfare benefits to platform-based gig workers. This makes Karnataka the second state in India, after Rajasthan, to formalise protections for gig economy workers.
Applicability and definitions
Applies to aggregators ie digital platforms that act as intermediaries between service providers and consumers, and platform-based gig workers engaged through these platforms. It defines key terms to clarify its scope:
- An aggregator is a digital intermediary that connects service providers with consumers.
- A gig worker is an individual who performs work based on contractually agreed payment terms through a digital platform.
- A platform refers to an electronic system that organizes work and facilitates payment.
Welfare fee and fund
To support platform-based gig workers' social security, the ordinance introduces a statutory welfare fee that platforms must pay. This fee will contribute to a Welfare Fund, which will also receive contributions from gig workers and government grants. The fund will be used to finance social security schemes and other welfare initiatives for these gig workers.
Implementation timeline
The ordinance is currently in temporary effect and must be ratified by the legislature within six weeks. Draft rules to operationalise its provisions will be published shortly.
Rights and protections for gig workers
Gig workers are granted several rights under the ordinance, including the right to registration, access to social security schemes, and grievance redressal mechanisms. Platforms are required to offer transparent contracts, ensure algorithmic transparency, and protect workers from arbitrary termination.
Welfare board and registration requirements
A welfare board will be established to oversee the registration of gig workers, manage social security schemes, and handle grievances. Aggregators must register with this board and provide relevant data on their gig workforce.
Disclosure and grievance mechanisms
Platforms are obligated to disclose clear and accessible information about grievance redressal mechanisms. They must also provide human points of contact to assist gig workers. A two-tier grievance redressal system will be implemented, beginning with an Internal Dispute Resolution Committee and escalating to the Welfare Board if necessary.
Penalties for non-compliance
Failure to comply with the ordinance may result in fines and interest on delayed payments, ensuring that platforms adhere to the new regulatory standards.
Aggregators should prepare for compliance by updating existing contracts, HR systems, and data governance practices.
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