IAMAI Warns Karnataka Gig Worker’s Bill To Impact Ease Of Business In The State

Internet and Mobile Association of India (IAMAI) has urged the Karnataka government to stall its proposed legislation for gig workers for further consultation, expressing concerns that it could “negatively impact” the ease of doing business in the state.

“We urge the state government to put the legislative process on hold and give a sufficient period of consultation of at least 30 to 60 days,” ET reported, citing IAMAI’s submission to the government.

The Karnataka government released the draft bill last month to protect the rights of gig workers in the state and provide them with social and income security. The draft of the Karnataka Platform-based Gig Workers (Social Security and Welfare) Bill, 2024, proposes various welfare measures for gig workers and mandates that app-based delivery and ride-hailing platforms offer social security benefits.

IAMAI stated that the state bill would result in a “dual levy” by requiring firms to contribute 1-2% of their annual turnover to a social security fund for benefits like health, death, and disability insurance, which are already mandated by the central government’s Code on Social Security (CoSS), 2020.

As per ET’s report, the draft bill lacks clarity on the benefits that will be provided to gig workers, IAMAI said in its submission.

It added that maintaining an updated database of gig workers increases administrative workload and financial expenses for companies.

“The transient nature of gig work also means that workers frequently move in and out of the workforce, complicating the continuous provision of benefits such as health insurance or retirement funds,” as per the submission.

It further pointed out that the lack of such welfare fees being imposed on offline businesses offering delivery or ride-hailing services will also lead to online services being more expensive and suffering from a competitive standpoint. 

This could even lead to a dip in demand for gig work, it added.

It also raised concerns about several aspects of the proposed legislation, including mandatory transaction data sharing, state government guidelines for worker-company contracts, a reportedly “inflexible” 14-day termination notice requirement, and mandatory transparency in automated systems and algorithms. 

The draft bill aims to “protect the rights of platform based gig workers, to place obligations on aggregators in relation to social security, occupational health and safety, transparency in automated monitoring and decision-making systems, to provide dispute resolution mechanisms, to establish a welfare board and create a welfare fund for platform based gig workers, to register platform based gig workers and aggregators in the state.”

If passed, then this would bring startups such as Swiggy, Zomato, Urban Company, Ola, Uber, Rapido, Flipkart, Amazon, and other similar platforms under the jurisdiction of the state government regarding their treatment of gig workers.

Karnataka would become the second state after Rajasthan to introduce a law for platform-based gig workers, if the bill is passed.

Currently, the draft Bill is available in the public domain and the government has sought comments from stakeholders on the proposals in the Bill.

Gig workers across various platforms have frequently protested nationwide against company policies concerning wage payments, social security benefits, working hours, and other grievances.

It is pertinent to note that last year, in its election manifesto, the Congress party pledged to establish a ‘Gig Workers’ Welfare Board’ in Karnataka with an initial funding of INR 3,000 Cr. The party also proposed a transparent policy for outsourcing gig worker employment if it assumed power in the state.

In July of the same year, the Karnataka government introduced a free accidental and life insurance cover worth INR 4 Lakh for gig workers, ensuring their social security. This insurance includes INR 2 Lakh for life insurance and another INR 2 Lakh for accidental coverage.

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