Karnataka's new draft bill ensures rights and provides better protection to gig workers, but it is likely to lead to compliance issues for online aggregators, which may pass on the costs to the consumer, according to labour law advocates.
The Karnataka Platform Based Gig Workers (Social Security and Welfare) Bill was released by the state government to protect the rights of gig workers.
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Aggregators must ensure contracts with gig workers, comply with state guidelines, provide written reasons and 14 days' notice for terminations and changes, give gig workers access to requested information, comply with health and safety standards, disclose grievance mechanisms, appoint a contact person for queries, and make quarterly filings. They must also pay a quarterly welfare fee, compensate gig workers weekly, and provide reasons for any deductions, according to the bill.
"The obligations that have to be undertaken by aggregators are likely to prove onerous in terms of compliance and costs, compared to the current regime," Ankita Ray, partner at Cyril Amarchand Mangladas, said.
These aspects will increase costs and also affect the payouts and cash flow. The compensation structure and transaction fee structure are also likely to be impacted due to this.Ankita Ray, Partner, Cyril Amarchand Mangladas
The bill grants gig workers the ability to reject a certain number of work requests weekly without penalty. It also allows gig workers to request information on work allocation, ratings and personal data processing from aggregators.
It essentially provides gig workers with more agency in their relationship with the aggregators, which was previously not accounted for, according to Ray.
The new bill recognises workers as a distinct category, providing social security and welfare benefits, ensuring their rights and protections, enforcing safe working conditions and safeguarding their data privacy, according to Anindya Mazumdar, partner at Singhania & Co.
The bill also states that the government will be able to make sector-specific contracts for gig workers. Ray claimed that this would lead to logistic and administrative issues for the aggregators, especially when most of them work on a pan-India basis.
State-specific requirements for gig workers in a particular location could prove to be challenging to implement and oversee.Ankita Ray, Partner, Cyril Amarchand Mangladas
Companies operating in multiple sectors may face challenges in navigating these diverse regulations, leading to potential legal disputes and compliance difficulties. Different sectors may develop varying regulations and expectations for gig workers, resulting in inconsistent treatment, Mazumdar said.
The bill also provides gig workers with essential rights and protections akin to regular employment, including access to social security benefits like pensions and health coverage, a formal grievance redressal mechanism, and the right to be registered with the state government, ensuring a unique ID applicable across all platforms.
This protects gig workers better, but it may increase costs and administrative burdens for businesses, potentially leading companies to reduce reliance on gig workers or pass on costs to consumers, negatively impacting operations and profitability, according to Mazumdar.
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