To bolster the welfare of gig employees, Karnataka is about to levy a 5 per cent cess cost on e-commerce platforms to ascertain a welfare board.
Chief Minister Siddaramaiah introduced this determination on Thursday after a gathering with Congress chief and Chief of Opposition in Lok Sabha, Rahul Gandhi, at his Delhi residence.
Siddaramaiah has mentioned {that a} complete Gig Staff’ Invoice might be introduced earlier than the state Cupboard for approval.
As soon as the Invoice is enacted, the employees employed by 12 main corporations, together with Amazon, Flipkart, Zomato, Swiggy, Ola, Uber, and Dunzo, will obtain social safety advantages, he mentioned. A small quantity — primarily based on the space travelled by the gig employee for delivering items or offering providers — will go to the welfare fund to be arrange beneath the Act, the CM mentioned.
The high-level assembly was attended by Karnataka Labour Minister Santosh Lad, IT-BT Minister Priyank Kharge, and Industries Minister M B Patil. It targeted on implementing the Gig Staff’ Welfare Act—a key promise from the Congress social gathering’s Bharat Jodo Yatra and election marketing campaign.
The assembly arrived at three main choices – organising a devoted board to supervise the welfare of gig employees; offering social safety advantages equivalent to medical health insurance, schooling assist, and different protections usually unavailable to employees within the unorganised sector, and assembly the board bills partly from the 5 per cent cess on payouts to gig employees by e-commerce and aggregator platforms.
Siddaramaiah mentioned, “That is about constructing an inclusive economic system the place nobody is left behind. The state authorities is dedicated to supplementing these funds to make sure complete welfare schemes, aligning with the provisions of the Code on Social Safety 2020, which permits platforms to contribute as much as 5 per cent for such functions”.
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Aside from medical health insurance, the quantity might be used to offer loans and different facilities for gig employees, he added.
This laws, which was earlier deferred twice, goals to formalise the welfare framework, constructing on an earlier draft that proposed a 1-2 per cent cess per transaction however was stalled on account of inside disagreements.
The assembly additionally noticed the participation of gig employee representatives—Rakshitha Dev from Karnataka, Salahuddin from Hyderabad, and Nikhil Dev.
Labour Minister Santosh Lad, mentioned, “Karnataka has already launched Payments for employees’ gratuity and cinema employees’ rights. That is about dignity and safety for these driving our fashionable economic system.”
Trade our bodies elevate issues
The announcement, nevertheless, has sparked criticism from trade our bodies like NASSCOM and IAMAI that raised issues in regards to the potential burden on e-commerce companies, particularly startups already grappling with skinny margins. They concern that corporations equivalent to Amazon and Flipkart, which have important operations in Karnataka, could face elevated operational prices, although the state’s pledge to cowl extra funding might ease some stress.
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A number of issues had been additionally raised by aggregators and associated tech corporations when the Labour Division, opened it up for public session. This included information privateness issues, queries on contributions by corporations for the welfare of gig employees and broadening the definition of gig employees.
Earlier dissent to Invoice
The Gig Staff’ Invoice had earlier run into tough climate previously. The Invoice, initially slated for 2024, was delayed on account of conflicting views inside the Karnataka authorities. Whereas Labour Minister Lad championed the trigger, IT-BT Minister Kharge and Industries Minister Patil had earlier raised issues about its influence on the state’s startup ecosystem and industrial progress. The Delhi assembly seems to have resolved these tensions, with all ministers now aligned on the necessity for motion.
Karnataka’s earlier makes an attempt to control e-commerce have additionally confronted resistance. In 2021, lockdown restrictions limiting e-commerce to important items led to operational chaos, with supply personnel harassed on account of obscure tips. Extra not too long ago, the Karnataka Agricultural Produce Advertising and marketing (Regulation and Improvement) (Modification) Invoice of March 2025 introduced e-commerce platforms beneath APMC oversight, mandating cess funds for agricultural gross sales—a transfer that drew objections from corporations like Amazon and Large Basket over compliance complexities.
