Karnataka Notifies Gig Workers’ Welfare Fee Under Social Security Framework

On 16-2-2026, the Government of Karnataka issued a notification regarding the mandatory collection of the Gig Workers’ Welfare Fee.

Gig Workers’ Welfare Fee Notification:

• This notification sets out a structured mechanism through which platforms and aggregators are required to contribute towards the social security and welfare of gig and platform workers across the state.

• The objective of this notification is to:

  • Extend social security benefits to gig and platform workers engaged through various digital intermediaries.

  • Mandate the levy and collection of a welfare fee from all platforms listed under Schedule I of the Act.

• These orders are issued under:

  • Karnataka Platform Based Gig Workers (Social Security and Welfare) Act, 2025

  • Karnataka Platform Based Gig Workers (Social Security and Welfare) Rules, 2025.

• Under the Karnataka Platform Based Gig Workers (Social Security and Welfare) Act, 2025:

  • Section 2 defines what qualifies as an “Aggregator”, “Platform”, “Payout”, and “Welfare Fee”, establishing which entities must comply and what types of payments are covered under the welfare fee mechanism.

  • Section 20 mandates a welfare fee of 1%—5% on every payout made by platforms/aggregators to gig workers.

  • Section 21 introduces the Payment and Welfare Fee Verification System (‘PWFVS’), requiring all worker payouts and welfare fee deductions to be mapped and disclosed.

• Under the Karnataka Platform Based Gig Workers (Social Security and Welfare) Rules, 2025:

  • Rule 17 mandates aggregators to calculate, self-declare, and pay the welfare fee quarterly, excluding “settled payments” like tips and incentives.

Welfare Fees:

• The welfare fee is calculated on every payout from the platform to the gig worker, excluding settled payments.

• The fee will be paid by:

  • Aggregators

  • Digital platforms

  • E-marketplaces

  • Ride-hailing services

  • Logistics and delivery platforms

  • Professional service marketplaces

• Welfare fee structure is as follows:

  1. Ride Hailing Services

     Type of Vehicle	Welfare Fee	Cap
     Two Wheelers	1%	₹0.50
     Three Wheelers	1%	₹0.75
     Four Wheelers	1%	₹1.00

  2. Food and Grocery Delivery Services

     Type of Vehicle	Welfare Fee	Cap
     Two Wheelers	1%	₹0.50

  3. Logistics Services

     Type of Vehicle	Welfare Fee	Cap
     Two Wheelers	1%	₹0.50
     Three Wheelers	1%	₹0.75
     Light Commercial Vehicle	1%	₹1.00
     Heavy Commercial Vehicle	1%	₹1.50

  4. E-Marketplace Services

     Type of Vehicle	Welfare Fee	Cap
     Two Wheelers	1%	₹0.50
     Three Wheelers	1%	₹0.75
     Light Commercial Vehicle	1%	₹1.00

  5. Professional Activity Providers

     Welfare Fee	Cap
     1%	₹1.50

  These rates are applicable from 13-2-2026.

  Purpose of Welfare fee Structure:

  • The welfare fee structure:

    • Establishes a dedicated fund for gig-worker welfare schemes.

    • Creates a transparent oversight mechanism for platform-worker transactions through the PWFVS.

    • Provides an enforceable compliance framework that holds platforms accountable.

  • All the platforms and aggregators are required to deposit the welfare fee at the end of each quarter, and the bank details will be provided on the Labour Department website.

  • Until the PWFVS is fully operationalized, platforms are permitted to self-report quarterly.

  Benefits to Gig Workers:

  • The welfare fee will support insurance, emergency aid, social security schemes, and other benefits.

  • The welfare fee is paid by platforms, not deducted from worker earnings, workers keep 100% of their payouts.

  • It acknowledges gig work and extends social protection.