Karnataka High Court Orders Gig Platforms to Deposit Welfare Dues

The Karnataka High Court has ordered platform companies to deposit a 1% welfare contribution with the court registry within three weeks, as it proceeds with a constitutional challenge against the state's new law governing gig workers. This interim order marks a significant development in a legal battle that could reshape India's gig economy.

The dispute centers on the Karnataka Platform-Based Gig Workers Act, 2025, which came into effect last year. The state had begun implementing the law by forming a Welfare Board, notifying the welfare contribution, and issuing compliance notices to platform companies. In response, the Internet and Mobile Association of India (IAMAI), along with major platforms like Swiggy and Zomato, challenged the Act in court.

The companies argue that Karnataka's legislation is in conflict with the central government's Code on Social Security, 2020. This central act already recognizes gig and platform workers and empowers the Union government to create welfare schemes for them. The petitioners contend that the state law is "repugnant" to the central legislation and therefore unconstitutional.

The High Court acknowledged the case raises important constitutional questions, noting that Parliament has already legislated in the sector. However, the court also questioned whether a state can still improve upon the central government's welfare framework. Simultaneously, it questioned the platforms' resistance to the welfare contribution, stating that gig workers deserve stronger social protection.