Why Gig Work Legislation is a Positive Step for Labour Protection in India

India’s gig workforce is rapidly growing, with estimates suggesting it will rise from around 8 million workers in 2020-21 to an impressive 24 million by 2029-30, according to the NITI Aayog, a government policy think tank. However, this growth has brought forward a pressing issue: these workers often lack proper protections, making them vulnerable to exploitation. Over the years, many gig workers have protested for better rights and entitlements, shedding light on their plight.

In August, Karnataka took a notable step by passing the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Bill, 2025, which is set to replace the earlier Ordinance by May 2025. This legislation is expected to benefit around 400,000 gig workers in the state. Other states like Bihar and Rajasthan have also introduced similar laws, while Jharkhand and Telangana are drafting theirs.

The Karnataka law introduces some significant features aimed at protecting gig workers. It provides for a tripartite welfare board that includes representatives from the workers, government, and platforms. Additionally, it mandates the registration of gig workers with this board and introduces a welfare fee ranging from 1% to 5% of the payout for every transaction on the platform. Furthermore, it protects gig workers from arbitrary deactivation of their IDs, a common issue that workers face.

Saurabh Bhattacharjee, an associate professor at the National Law School of India University, explains that Karnataka’s legislation is more comprehensively aligned with gig workers’ needs compared to laws in Rajasthan, which focus mainly on social security. The Karnataka and Bihar laws also emphasize transparency in contracts and grievance redressal, making them more robust in protecting worker rights.

While the Social Security Code, 2020—one of four labour codes yet to be implemented—allows for social security schemes, it lacks concrete entitlements for workers. This absence of clear entitlements increases the risk of repeating the failures seen with the Building and Other Construction Workers Act (BoCWA), which suffered from systematic underutilization of funds, much to the detriment of workers.

Most workers in India are in informal roles with limited or no social security. The introduction of specific laws for gig workers is a necessary step toward redefining the traditional employer-employee relationship. Globally, there’s an ongoing debate about whether gig workers are employees or independent contractors. Countries like New Zealand, the Netherlands, and Spain have recognized gig workers as employees, granting them more rights and protections.

The state laws like the ones in Karnataka and Bihar aim to provide protections without getting caught in the debate over whether gig workers are employees. They focus on delivering social security and regulating work conditions, though challenges remain regarding minimum wage guarantees and collective bargaining rights.

Karnataka’s Platform-Based Gig Workers Act is among the most comprehensive efforts so far. It introduces essential elements such as:

• A welfare board representing all stakeholders.
• Mandatory registration for gig workers.
• A welfare fee on platform transactions, ensuring better funding for worker rights.
• Transparency regarding the algorithms used by platforms to make decisions affecting workers.

Despite its progress, gaps remain. For instance, there is still no assurance of a minimum wage or collective bargaining rights. However, these state laws mark a critical step toward better protection for gig workers that can be further improved in the coming years.

The issue of algorithmic decision-making and its impact on gig workers cannot be overlooked. Current laws don’t adequately regulate this area. While Karnataka’s Act requires transparency from platforms about their automated systems, it does not outright prohibit dismissals based on algorithmic decisions. There’s a need for regulators to be better trained in understanding technology’s impacts on gig work to ensure effective oversight.

As gig workers navigate the evolving landscape, their voices and needs must remain a priority. The legal frameworks being developed must adapt to technological changes and continue to protect these workers.

With India’s gig economy rapidly expanding, the recent legislative developments are a welcome step. They signal an important shift toward better labour protections that can create a more equitable work environment for gig workers.

These changes can be a significant move in ensuring social security for gig workers, making them feel more secure in their occupations, and helping them thrive in a growing economy.

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