Karnataka Sets Up Working Groups To Fix Gig Worker Welfare Fee

SUMMARY

These groups comprise representatives from platforms, think tanks, technocrats and tech companies

The Karnataka Platform-based Gig Workers Ordinance proposes levying a 1-5% charge per transaction as welfare fee for the workers

The state government has a possibility of fixing a higher rate on higher revenue-earning businesses, such as ride-hailing services

The Karnataka government has reportedly set up two working groups to estimate the quantum of the fee to be levied towards securing the welfare of gig workers.

These groups comprise representatives from platforms, think tanks, technocrats and tech companies, as per an ET report, citing additional labour commissioner G Manjuanth.

The Karnataka Platform-based Gig Workers (Social Security and Welfare) Ordinance proposes levying a 1-5% charge per transaction as welfare fee for the workers. However, the ordinance does not specify the exact quantum of the welfare fee to be charged for the various kinds of private players operating in this domain.

The ordinance extends to aggregators, including Swiggy, Zomato, Amazon, Ola and Uber, among others.

One of the sources told the publication that the state government has a possibility of fixing a higher rate on higher revenue-earning businesses, such as ride-hailing services.

So far, the Code on Social Security has set the threshold for fees at 5% of the amount paid to gig workers.

The development comes about three months after the Karnataka chief minister’s office announced plans to establish a welfare board for gig workers, in April.

Following which, Karnataka governor Thaawarchand Gehlot cleared the Gig Workers (Social Security and Welfare) Ordinance a month later.

In 2024, the state government released a draft of the same bill, aimed at protecting the rights of gig workers in the state and also to offer them social and income security, proposing various welfare measures for gig workers, while also mandated app-based delivery and ride-hailing apps to provide them with social security benefits.

With over 2 Lakh gig workers in Bengaluru alone, Karnataka’s move underscores the urgent need for protections in this fast-growing sector.

Meanwhile, the government has been discussing the transaction fee over online aggregator platforms since last October, to benefit its gig workers.

Aside from the transaction fee that is being approved, the government has been taking numerous initiatives including the introduction of a pension scheme and a social security scheme for platform-based gig workers’ welfare, earlier this year.