On July 2, 2025, the Government of Karnataka published the draft Karnataka Platform-Based Gig Workers (Social Security and Welfare) Rules, 2025 ("Draft Rules") pursuant to Section 28 of the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Ordinance, 2025 (“Ordinance”). These Draft Rules are intended to operationalize the framework laid down under the Ordinance by providing detailed mechanisms for the registration of aggregators, disclosure and data submission requirements, grievance redressal, occupational safety standards, and social security contributions for gig workers. The Draft Rules mark a significant step towards recognizing and regulating the rights and welfare of platform-based gig workers in the state.

Key Provisions of the Draft Rules

Registration of Aggregators

The Draft Rules mandate that every aggregator or platform operating within the state of Karnataka must register itself on a designated web portal maintained by the Board constituted under the Ordinance. The registration requires the submission of key corporate details, including the legal name, address, email, permanent account number, goods and services tax number, corporate identification number, and contact person details. In cases where a legal entity operates multiple platforms, a single registration is sufficient, provided that the details of any new platforms launched or acquired subsequently are notified to the Board within 60 (sixty) working days.

The Board is required to publish a register of all registered aggregators on its website on a quarterly basis. This register will include the legal name of the aggregator, registration number, number of registered gig workers, permanent account number, goods and services tax number, corporate identification number, and the contact details of the authorised representative. However, the register will not include any operational or financial information of the aggregator.

Data Submission and Maintenance

Under the Draft Rules, aggregators are obligated to electronically submit a machine-readable database of all gig workers engaged on their platforms. This database must include only those workers who have been engaged for a period of not less than 90 (ninety) days and have completed at least one gig. The submission must be made through a secure digital portal notified by the Board, which will also prescribe the data schema, security protocols, and authentication mechanisms. Data transmission must comply with current encryption standards, and the Board is responsible for maintaining the confidentiality and security of all submitted data.

In addition, aggregators are required to update the Board on a quarterly basis regarding any additions or removals from their pool of gig workers. The Draft Rules also provide flexibility in such reporting obligations to platforms experiencing genuine technical difficulties in complying with submission timelines by applying for an extension of up to 60 (sixty) working days.

Transparency and Disclosures

Every aggregator is required to establish a designated mechanism to respond to requests from gig workers regarding decisions that impact their earnings, ratings, or work allocation, such as fare structures, customer feedback, or earnings calculations. Responses must be provided within 30 (thirty) working days of receipt of such request. However, aggregators are not obligated to disclose proprietary information such as source code, algorithms, or detailed system architecture.

Further, aggregators must disclose information related to their grievance redressal mechanisms, procedures for deactivation or termination, welfare schemes, accident and insurance relief, complaint redressal (including for sexual or physical harassment), and social security entitlements on their digital platforms. These disclosures are intended to ensure transparency and accessibility for gig workers.

Grievance Redressal and Dispute Resolution

The Draft Rules provide for a multi-tiered dispute resolution mechanism. Aggregators are required to constitute an Internal Dispute Resolution Committee (IDRC) in accordance with the provisions of the Ordinance, to hear and resolve grievances of gig workers, particularly in relation to terminations or deactivations. Aggrieved gig workers must file an appeal within 7 (seven) working days of termination, and the IDRC is expected to dispose of such appeals within 15 (fifteen) working days of such appeal. If dissatisfied, workers may escalate the matter to the Board, which shall dispose of the appeal in accordance with the by-laws approved by the appropriate government.

Additionally, gig workers may approach the Grievance Redressal Officer (GRO) appointed by the government of Karnataka (“State Government”) for issues related to entitlements and social security benefits under the Ordinance. The GRO is required to dispose of such applications within timelines prescribed under the Karnataka Sakala Services Act, 2011. Further appeals may be filed before the appellate authority, which must dispose of the matter within 90 (ninety) days, with implementation of the order by the Board to be completed within 60 (sixty) days thereafter. The appellate authority must follow due process of law and observe the principles of natural justice in addressing such appeals.

Occupational Safety and Health Standards

The Draft Rules further empower the Board to frame sector-specific standards for occupational safety and health, in consultation with domain experts and stakeholders. Aggregators are required to ensure compliance with these standards within a maximum period of 6 (six) months from the date of publication on the official portal of the Board.

Social Security and Welfare Fund

One of the critical provisions of the Draft Rules is the imposition of a ‘welfare fee’ on aggregators, calculated as a percentage [between 1 (one) to 5% (five percent)] of payouts made to gig workers. Aggregators must self-declare and remit this fee on a quarterly basis, within 30 (thirty) working days from the end of each quarter. Payment must be made through RBI-permitted banking channels to the account of the Board.

The Rules provide mechanisms for the reconciliation of welfare fees, particularly in cases where overlapping contributions are made under other laws. Excess payments may be refunded upon application to the Board within 90 (ninety) days. Delays in remitting the welfare fee attract interest, unless attributable to technical failures of the designated portal, in which case an extension of up to 30 (thirty) additional days may be granted.

The Board has exclusive authority to manage and allocate funds received through the welfare fee and other sources, including voluntary contributions. Utilisation of funds must be done in accordance with an annual budget approved by the government.

Reporting and Compliance

Aggregators are required to submit quarterly returns in a machine-readable format, including details such as city of operation, UAN numbers, and other information as may be prescribed by the State Government. The Draft Rules also stipulate penalties for non-compliance, including the imposition of fines by the Board following a show-cause process, and escalation to the State Government in case of appeals.

Challenges and Implications for Platforms

While the Ordinance, along with the Draft Rules establish a comprehensive framework to ensure the welfare and protection of gig workers, their implementation will pose significant challenges for aggregators and platforms.

First, the volume and frequency of compliance obligations, including quarterly reporting, database submissions, welfare fee calculations, and grievance redressal mechanisms, will impose a substantial administrative and operational burden, particularly on small and medium-sized platforms. For large sized platforms, these compliances will become cumbersome and expensive, provided the volume of gig-workers associated with such platforms.

Second, the requirement to maintain and transmit sensitive worker data in compliance with encryption and privacy standards necessitates investment in robust IT infrastructure. Ensuring data security and avoiding breaches, especially when multiple stakeholders are involved, could be a critical risk area.

Third, the imposition of financial obligations in the form of welfare fees and potential penalties for delay or non-compliance may significantly affect the margins and business models of aggregator platforms. It is noteworthy that this model is in conflict with the turnover-based contribution model proposed under the Code on Social Security, 2020. Moreover, the Draft Rules empower the Board to assess and impose fines, and the procedural safeguards afforded to platforms in this process are limited.

Fourth, the detailed grievance redressal process, while worker-friendly, may result in a high volume of disputes and appeals, particularly in sectors such as ride-sharing or delivery services, where gig engagements are frequent and short-term. Aggregators will need to train their internal IDRC members, set up digital systems to track grievance status, and respond within strict timelines.

Finally, while the Draft Rules signal a progressive regulatory intent, their implementation will depend on the timely development and readiness of the digital portals, clarity on sector-specific safety standards, and ongoing engagement between the government and platform operators.

Conclusion

The Karnataka Platform-Based Gig Workers (Social Security and Welfare) Rules, 2025 represent a pioneering effort by a State Government to provide formal recognition and social protections to gig workers. The Draft Rules are detailed, comprehensive, and ambitious in scope, addressing not only welfare contributions and registration, but also digital transparency, dispute resolution, and workplace safety.

For aggregators and platforms, these Draft Rules bring with them an urgent need for compliance readiness, legal risk management, and technology integration. Further, with the notification of the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Act, 2025 on September 12, 2025, the Ordinance stands repealed (“Act”). It must be noted that the Act has been notified without any material substantive differences with the Ordinance, and the Act formalizes the Ordinance. Accordingly, the final rules under the said Act can also be expected to mirror the Draft Rules. As the final rules are awaited, stakeholders may wish to engage with the State Government during the consultation period to address practical concerns and seek clarifications. In parallel, companies should begin evaluating their current practices, identifying compliance gaps, and setting up internal systems to meet the regulatory obligations set forth in the draft.

Please find attached a copy of the draft Rules, here.

This update has been contributed by Aayush Kumar (Partner) and Paridhi Rastogi (Associate).

Argus Knowledge Centre is now on WhatsApp! Send us a message on +91 8433523504 to receive updates from our Knowledge Centre.