The Karnataka High Court has declined to stay the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Act, 2025, mandating leading platforms to deposit the welfare fee while granting protection from coercive enforcement actions amid ongoing legal challenges.
- Karnataka HC refuses stay, mandates fee deposit by platforms
- Consumer tech leaders challenge law’s constitutionality
- Law creates state-level parallel to Centre’s social security code
What happened
The Karnataka High Court declined to grant a stay on the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Act, 2025, which institutes a welfare board and social security benefits for gig workers. However, the court granted conditional interim relief by protecting tech platforms like Swiggy, Zepto, Urban Company, Eternal, and others from coercive action, provided they deposit the welfare contribution for the April-June quarter within three weeks.
The court has scheduled further hearings and directed the Karnataka government to respond by July 30. The law, enacted in September 2025, obliges platform aggregators to contribute a 1% welfare fee per transaction, establish grievance redressal mechanisms, and ensure transparency in worker account deactivations.
Why it matters
Karnataka’s legislation is the first state-level law in India to specifically regulate social security for platform-based gig workers, introducing protections beyond the Centre’s national Code on Social Security, 2020. This has prompted industry pushback citing duplicative legislative frameworks and legal challenges around constitutionality, alleging violations of fundamental rights and arbitrariness.
The court’s decision to uphold the law while allowing interim relief balances protecting workers’ welfare rights and mitigating immediate operational burdens on platforms. The 1% transaction welfare fee and mandated dispute mechanisms could set important precedents, potentially influencing other states to adopt similar regulatory approaches.
What to watch next
The Karnataka government’s formal response to the legal challenges is due by July 30, with the next hearing scheduled for August 14, which will be critical in determining the future enforcement and validity of the gig workers law. Platforms’ compliance with the interim deposit requirement will also be closely monitored.
Stakeholders should watch for any judicial interpretations on the coexistence of state and central frameworks, potential amendments to the law or rules, and the rollout of grievance redressal boards. Broader implications include the development of gig worker protections across India and how consumer internet companies adapt to evolving regulatory landscapes.