Governor Thaawarchand Gehlot approves Karnataka gig workers’ welfare ordinance, here’s what it says

The ordinance mandates platforms to pay a gig workers’ welfare fee, set at 1 per cent to 5 per cent of the payout to gig workers per transaction. The state government will notify the exact fee structure for different categories of platforms within six months.

The welfare fee must be collected by aggregators and deposited quarterly into the Karnataka Gig Workers Social Security and Welfare Fund. The state government will prescribe the collection method.

The ordinance states that failure to deposit the welfare fee on time incurs a 12 per cent per annum simple interest penalty from the due date until payment. Additional non-compliance may result in fines of up to Rs 5,000 for the first violation, and Rs 1 lakh for subsequent violations.

Payments into the fund, including the welfare fee, will support social security benefits such as income security during unemployment, sickness, maternity, or work-related injuries. The Board is restricted to using no more than 5 per cent of the fund for administrative costs, ensuring maximum allocation for worker welfare.

All payments to gig workers and corresponding welfare fee deductions will be recorded in the soon-to-be-formed, state-administered Payment and Welfare Fee Verification System, monitored by the Karnataka Platform Based Gig Workers Welfare Board.

As per the ordinance, aggregators must make payouts to gig workers as per the contract, with mandatory cycles of daily, weekly, bi-weekly, or monthly payments.

The ordinance prohibits arbitrary termination of gig workers, requiring aggregators to provide written reasons and a 14-day notice, except in cases of bodily harm, where immediate action is allowed with a right to appeal.

Aggregators and platforms must also register with the board within 45 days of the ordinance’s commencement and provide transparent contracts with fair terms, including the right to refuse tasks.

The welfare board and the members who will be a part of it

The ordinance mandates the establishment of the Karnataka Platform Based Gig Workers Welfare Board, headquartered in Bengaluru.

The board will oversee the registration of gig workers and aggregators, monitor welfare fee collection, and implement social security schemes. It will also engage with workers’ associations, ensure transparency, and provide recommendations to the state government for tailored schemes, especially for women and persons with disabilities.

The board will be chaired by the minister in charge of the labour department, serving as the ex-officio chairperson. Other ex-officio members will include the additional chief secretary or principal secretary, or secretary to government from the labour department, and the information and technology department, or their nominees not below the rank of joint secretary. The commissioner of the commercial taxes department or a nominee not below the rank of joint commissioner is also an ex-officio member.

Additionally, a chief executive officer appointed by the state government will act as the executive in charge of day-to-day functions and serve as the ex-officio member secretary of the board.

The board will also have four representatives of gig workers and four representatives of aggregator platforms, all nominated by the state government. Furthermore, two members from civil society with experience in the gig economy or subject matter expertise will be nominated. A technical expert in data collection and IT systems may also be invited as a special invitee to provide inputs when necessary.