The Karnataka High Court has declined to stay the implementation of the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Act, 2025, while directing app-based platforms challenging the law to deposit the disputed welfare fee with the court registry within three weeks, according to recent reports.
What We Know So Far
In 2025, the Karnataka government enacted the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Act, 2025, to provide a social security framework for gig workers. Platforms including Eternal, which owns Zomato and Blinkit, Swiggy, Zepto, Urban Company and Valmo Transportation have challenged the legislation in court.
Under the notified rules, the welfare fee is capped at 50 paise for each two-wheeler ride, 75 paise for three-wheeler services and Re 1 for four-wheeler trips. Food and grocery delivery services are also subject to a 1% welfare fee on worker payouts, with the proceeds earmarked to fund welfare measures through the Karnataka Platform-Based Gig Workers Welfare Board.
The companies argue that the law conflicts with the Parliament's Code on Social Security (COSS), 2020, which already provides a framework for social security contributions by aggregators. They have challenged the Karnataka law's constitutional validity, contending that it creates duplicate financial and regulatory obligations.
The companies have also argued that Section 114(4) of the Code on Social Security already requires aggregators to contribute to the Social Security Fund. They contend that Karnataka has effectively imposed an additional levy despite not notifying any welfare schemes for gig workers, raising questions over how the collected funds would be utilised.
Karnataka Advocate General Shashikiran Shetty, representing the state government, disputed the argument that the two laws overlap. He argued that the state's legislation supplements the central framework rather than conflicts with it, adding that Rajasthan, Bihar and Telangana have also enacted similar laws.
Balancing the interests of the platforms, the state government and gig workers, the High Court directed the companies to deposit the welfare fee with the court registry instead of the state government. It also restrained the state from taking any coercive action against the petitioners, provided they comply with the interim directions.
The matter has been posted for further hearing on July 31, with the Karnataka government directed to file its objections by July 30.
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