Karnataka Gig Worker Law Challenged by Companies in April 2026

Major delivery companies are fighting a 2025 law that mandates welfare fees for workers. This legal move could delay social security benefits for thousands of gig workers across the state.
By Newsroom | Labor Law, Karnataka |

Platform companies contest new legislation designed to provide social security and welfare, sparking union condemnation.

The Karnataka Platform-Based Gig Workers (Social Security and Welfare) Act, 2025, is facing a legal challenge in the Karnataka High Court. Companies including Swiggy, Zepto, Zomato, and Urban Company, alongside the Internet and Mobile Association of India (IAMAI), have filed petitions arguing the state law conflicts with existing central legislation, specifically the national Code on Social Security.

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The core of the platforms' argument rests on the doctrine of repugnancy under Article 254 of the Indian Constitution. They contend that the state Act imposes "substantially similar welfare structures" and creates "additional financial obligations," effectively forcing them to contribute to welfare under two separate regimes. Petitioners claim this dual imposition, particularly a welfare fee of 1 to 5 percent of payouts per transaction, creates an undue financial burden and operational complexity.

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The unions, including the Indian Federation of App-Based Transport Workers (IFAT), Telangana Gig and Platform Workers Union (TGPWU), and Karnataka App-Based Workers Union (KAWU), have vocally condemned the move. They frame the legal challenge as a direct attempt to deny gig workers access to essential social security, welfare benefits, and fair working conditions.

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"The reality is that gig workers across India continue to remain without adequate social protection despite years of promises."

UNIONS REITERATE CALL FOR WORKER RECOGNITION

Union leaders have strongly opposed the platforms' stance, asserting that the Karnataka Act is aligned with evolving global labour standards. They frequently cite ILO Convention No. 193 (C193), an international standard for workers in the platform economy, as evidence that such protections are becoming a global norm.

Shaik Salauddin, national general secretary of IFAT and president of TGPWU, stated that the Act "in no way replaces the COSS" (Code on Social Security), implying the platforms' legal appeal reveals their underlying "insecurity." Unions argue that social security is a fundamental right and that the digital economy should not be built on exploitation. They are urging the companies to withdraw their challenge and engage in dialogue.

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"States have both the constitutional authority and moral responsibility to protect workers from exploitation and fill these gaps."

BACKGROUND: THE GIG ECONOMY AND REGULATORY DEBATE

The Karnataka Gig Workers Act, passed in 2025, aims to establish a framework for the social security and welfare of platform-based gig workers. This includes provisions for worker registration and the collection of welfare fees from aggregators. The emergence of this state-level legislation highlights a broader, ongoing debate across India regarding the classification and rights of gig workers.

While platform companies argue for regulatory clarity and to avoid duplicative compliance, worker unions and advocates maintain that existing protections are insufficient. They emphasize the precarious nature of gig work and the urgent need for a robust social safety net, referencing international labour standards to bolster their arguments for stronger worker rights in the burgeoning platform economy. Industry observers suggest the legal challenge stems from anxieties about financial stability and the potential for regional regulatory fragmentation, impacting the operational landscape for aggregators.

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Frequently Asked Questions

Q: Why are companies like Swiggy and Zomato challenging the Karnataka Gig Workers Act in April 2026?
These companies argue that the state law conflicts with national rules and creates unfair extra costs. They claim paying welfare fees on top of existing requirements is a financial burden that creates legal confusion.
Q: How does the Karnataka Gig Workers Act affect gig workers today?
The 2025 law was designed to provide social security and welfare benefits to app-based workers. If the law is blocked by the court, workers may lose access to these new protections and welfare funds.
Q: What do worker unions say about the legal challenge by platform companies?
Unions like the KAWU argue that companies are trying to avoid paying for basic worker rights. They believe the state has a duty to protect workers from exploitation and that the law is necessary for fair treatment.
Q: What happens next for gig workers in Karnataka?
The case is currently in the Karnataka High Court. Until the court makes a final decision, the implementation of welfare fees and benefits remains uncertain for thousands of delivery and transport workers.