A consortium of leading internet companies, including Swiggy and Zepto, has legally challenged Karnataka's new gig worker welfare law. In a petition to the Karnataka High Court, the firms argue the state act is unconstitutional. They contend it creates a redundant framework that conflicts with existing central government legislation on social security.
The Legal Challenge Unpacked
The writ petition, led by the Internet and Mobile Association of India (IAMAI), names Swiggy, Zepto, and Urban Company as petitioners. They assert the Karnataka Platform Based Gig Workers Act, 2025, unlawfully overlaps with the central Code on Social Security, 2020. This central code already provides a comprehensive national framework for gig worker welfare.
The core of their argument rests on the doctrine of repugnancy under Article 254 of the Constitution. The petitioners contend that once Parliament has legislated on a subject, a state cannot enact a parallel and inconsistent law. This legal conflict, they argue, renders the Karnataka Act invalid and unenforceable.
Beyond the main legislation, the challenge also targets the associated rules and the creation of the Gig Workers Welfare Board. The companies seek to quash notices demanding the formation of dispute resolution committees and the payment of welfare fees. These directives are part of the allegedly unconstitutional state-level mechanism.
A Closer Look at Karnataka's Gig Worker Act
Karnataka became the first state to enact a dedicated law for gig workers, aiming to provide crucial social security protections. The legislation establishes a welfare board and a fund to manage benefits for this growing workforce. These benefits include life insurance, medical assistance, and old-age protection, financed by platform contributions.
A central feature of the law is a 1% welfare fee levied on each transaction, with specific caps for different industries. For instance, food delivery platforms face a cap of ₹0.50 per order, while professional services have a higher cap of ₹1.50. This fee is intended to directly fund the social security schemes.
The Act also introduces a robust two-tier grievance redressal system to protect workers from arbitrary account deactivations. Platforms must establish Internal Dispute Resolution Committees to handle initial complaints regarding payouts and terminations. This measure aims to bring greater transparency and fairness to algorithmic management.
Industry and Worker Reactions
The legal challenge comes as the state government actively implements the law, having already onboarded several major platforms. Authorities have issued notices for the first welfare fee payments, due by July 5 for the preceding quarter. The government reports that details for approximately 1.2 lakh active workers have been submitted.
In response to the lawsuit, prominent gig worker unions have strongly condemned the platforms' actions. The Indian Federation of App-Based Transport Workers (IFAT) argues that the state law complements, rather than conflicts with, the central legislation. They view the act as a vital step toward securing long-overdue protections for workers.
The unions have publicly urged the companies to withdraw their petition and collaborate with the government and worker representatives. They emphasize that social security and fundamental labor rights for gig workers are non-negotiable principles. This stance highlights the deep divide between the platforms and the workforce they engage.
This legal confrontation places Karnataka's pioneering gig worker legislation at a critical crossroads, with platforms questioning its validity. The High Court's decision will not only determine the fate of this act but also set a significant precedent for gig economy regulation across India. The outcome will profoundly impact the debate over worker rights and corporate responsibility.