Industry bodies write to Karnataka government about lack of clarity around welfare fee of gig workers

Industry bodies urge Karnataka government for clarity on gig workers' welfare fee and its alignment with national regulations.

As Karnataka is expected to implement the proposed 1% welfare fee on payouts to gig workers effective from April 5, 2026, industry bodies have written to the State Government expressing concerns about the lack of clarity around the same. 

IndiaTech.org, an industry association representing Indian startups and technology companies, and the Internet and Mobile Association of India have written to the government, pointing out that the welfare schemes the fee is meant to fund are yet to be notified. 

“Karnataka has not clarified in the Act where the money collected will get deployed,” Rameesh Kailasam, CEO & President of IndiaTech.org, told The Hindu. 

He added that many aggregators already provide insurance coverage to gig workers through different insurance providers, and, therefore, platforms need clarity on what the government would cover so they can adjust their existing coverage accordingly.

Echoing similar sentiments, a communique from IAMAI noted that commencing mandatory welfare fee contribution without corresponding operational State schemes would risk an unavoidable duplication of financial obligations, and may compel aggregators to discontinue existing private insurance coverage, resulting in unintended gaps in protection for gig workers.

The associations stated that there are disconnects between the Code on Social Security (CoSS) notified by the Central Government and the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Act, 2025.