The Internet and Mobile Association of India (IAMAI) has requested the Karnataka government to postpone collecting a new welfare fee from ecommerce operators for gig workers. This request is due to unresolved operational issues, primarily the lack of clarity on how contributions under the state's new law will offset similar mandates under the central government's social security code, which could lead to duplicate payments.
Additionally, the association notes that specific welfare schemes for workers have not yet been officially notified, and mandatory fees might force companies to discontinue existing private insurance benefits, creating potential protection gaps. The IAMAI argues collection should only begin after welfare programs are finalized and a clear reconciliation mechanism between state and central rules is established.
The Karnataka law mandates a fee of 1% of an operator's commission (with caps) to fund a social security fund, which is expected to raise ₹250-300 crore annually from major platforms operating in the state.
Main Topics: Karnataka's gig worker welfare fee, industry request for deferral, conflict with central social security code, lack of notified welfare schemes, potential for duplicate financial obligations.
The Internet and Mobile Association of India (IAMAI) has urged the Karnataka government to defer the levy of a gig worker welfare fee on ecommerce operators until the state and the centre work out a mechanism for offsetting contributions and notify specific welfare programmes for gig workers.
Per the Karnataka Platform-based Gig Workers (Social Security & Welfare) Act, 2025, ecommerce operators are required to pay 1% of their commission, subject to a cap, to fund gig workersâ welfare.
The state government has capped the levy at 50 paise, 75 paise, and Re 1 depending on the platformâs business model, in a move aimed at cushioning the impact on smaller players. The government expects to mobilise between â¹250 crore and â¹300 crore annually through the fee.
Karnataka hosts several app-based service providers including Amazon, Zomato, Uber, Ola, Meesho, Porter, and Blinkit, who engage thousands of gig workers.
In a letter to the state government, the association highlighted operational issues that need resolution before contributions to the Karnataka Gig Workersâ Social Security and Welfare Fund begin.
It pointed out that the union governmentâs Code on Social Security, 2020, already mandates aggregators to contribute between 1% and 2% of their annual turnover towards the social security of gig workers. At the same time, the state act mandates a welfare fee of 1â5% on payouts made by aggregators to platform workers.
While welfare payments under the Karnataka law would be deemed to satisfy obligations under the central code, the mechanics of such adjustments remain unclear. In the absence of guidelines on reconciliation aggregators could effectively face duplicative obligations, the association noted.
In this context, the IAMAI urged the government to keep welfare fee collection in abeyance until Karnataka and the centre align on a mechanism for inter-governmental reconciliation.
The association has also flagged that the government is yet to notify welfare schemes under the act. Several aggregators already provide insurance to gig workers and pay the premiums for the same. Introducing mandatory contributions without operational state schemes could result in duplication of financial obligations and may force aggregators to discontinue existing insurance coverage, potentially creating protection gaps for workers, it said.
According to the association, the fee collection could begin once welfare programmes are finalised and implemented, and clarity emerges on harmonising obligations under the state act and the Code on Social Security, including formal recognition of reconciliation, or offset mechanisms.
Karnatakaâs welfare fund will be overseen by a 16-member Gig Workers Welfare Board headed by state labour minister Santosh Lad.
Karnataka was among the first in the country to frame a policy for gig workers, an initiative that was discussed with Chief Minister Siddaramaiah, Deputy Chief Minister D K Shivakumar, and IT/BT minister Priyank Kharge, and had the backing of Congress leader Rahul Gandhi.
Bengaluru alone is estimated to have about 2.75 lakh gig workers engaged in services such as ride-hailing, ecommerce, and food delivery. Across the state, the government estimates that nearly five lakh gig workers are associated with platform-based services and stand to benefit from the legislation.
Per the Karnataka Platform-based Gig Workers (Social Security & Welfare) Act, 2025, ecommerce operators are required to pay 1% of their commission, subject to a cap, to fund gig workersâ welfare.
The state government has capped the levy at 50 paise, 75 paise, and Re 1 depending on the platformâs business model, in a move aimed at cushioning the impact on smaller players. The government expects to mobilise between â¹250 crore and â¹300 crore annually through the fee.
Karnataka hosts several app-based service providers including Amazon, Zomato, Uber, Ola, Meesho, Porter, and Blinkit, who engage thousands of gig workers.
In a letter to the state government, the association highlighted operational issues that need resolution before contributions to the Karnataka Gig Workersâ Social Security and Welfare Fund begin.
It pointed out that the union governmentâs Code on Social Security, 2020, already mandates aggregators to contribute between 1% and 2% of their annual turnover towards the social security of gig workers. At the same time, the state act mandates a welfare fee of 1â5% on payouts made by aggregators to platform workers.
While welfare payments under the Karnataka law would be deemed to satisfy obligations under the central code, the mechanics of such adjustments remain unclear. In the absence of guidelines on reconciliation aggregators could effectively face duplicative obligations, the association noted.
In this context, the IAMAI urged the government to keep welfare fee collection in abeyance until Karnataka and the centre align on a mechanism for inter-governmental reconciliation.
The association has also flagged that the government is yet to notify welfare schemes under the act. Several aggregators already provide insurance to gig workers and pay the premiums for the same. Introducing mandatory contributions without operational state schemes could result in duplication of financial obligations and may force aggregators to discontinue existing insurance coverage, potentially creating protection gaps for workers, it said.
According to the association, the fee collection could begin once welfare programmes are finalised and implemented, and clarity emerges on harmonising obligations under the state act and the Code on Social Security, including formal recognition of reconciliation, or offset mechanisms.
Karnatakaâs welfare fund will be overseen by a 16-member Gig Workers Welfare Board headed by state labour minister Santosh Lad.
Karnataka was among the first in the country to frame a policy for gig workers, an initiative that was discussed with Chief Minister Siddaramaiah, Deputy Chief Minister D K Shivakumar, and IT/BT minister Priyank Kharge, and had the backing of Congress leader Rahul Gandhi.
Bengaluru alone is estimated to have about 2.75 lakh gig workers engaged in services such as ride-hailing, ecommerce, and food delivery. Across the state, the government estimates that nearly five lakh gig workers are associated with platform-based services and stand to benefit from the legislation.
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