Karnataka to levy welfare fee on ecommerce platforms to fund gig workers’ social security
The state expects to raise up to Rs 300 crore annually through a capped levy on platform aggregators.
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The Karnataka government will impose a welfare fee on ecommerce and app-based service platforms to fund social security measures for gig workers under the Karnataka Platform-based Gig Workers (Social Security & Welfare) Act, 2025, officials told The Times of India.
Under the framework, platform operators will be required to contribute a fee equivalent to 1 percent of their commission earnings, subject to caps based on business models. The state has limited the per-transaction contribution to 50 paise, 75 paise, or Re 1 to minimise the impact on smaller platforms.
The collections will be routed to a dedicated Gig Workers Welfare Fund, which will be overseen by a 16-member Gig Workers Welfare Board chaired by the state labour minister. A formal notification detailing the fee structure and compliance requirements is expected to be issued shortly, officials said.
According to government estimates, the levy could generate between Rs 250 crore and Rs 300 crore annually. Aggregators will be required to remit the welfare fee on a weekly basis to a designated bank account managed by the board.
To support implementation, the labour department is developing a digital system to track payments and verify welfare contributions. Officials said the department is working with the International Institute of Information Technology, Bangalore (IIIT-B), and the Azim Premji Foundation to create a software platform for fee collection and monitoring.
Karnataka hosts several large app-based service providers across ecommerce, logistics, ride-hailing and food delivery, collectively engaging thousands of gig workers. Platforms operating in the state will also be required to share worker data with the welfare board to facilitate enrolment and delivery of social security benefits.
The labour minister is expected to convene the first meeting of the welfare board soon, with the department aiming to operationalise the fund by the end of August.
Also read: Karnataka Labour Department sets up gig workers’ welfare board, mandates aggregator fee
Officials estimate that Bengaluru alone has around 2.75 lakh gig workers, while the total number of platform-based workers across Karnataka is close to five lakh. The welfare framework is expected to cover workers across services such as ride-hailing, ecommerce, food delivery and logistics.
Karnataka is the first state to formalise a comprehensive welfare mechanism for gig workers through legislation. The policy framework was shaped following consultations involving state leaders and senior party officials ahead of the law’s passage.
