Welfare Fees, Welfare Boards and Platform Capture

Karnataka’s Platform-Based Gig Workers (Social Security and Welfare) Act, 2025, marks a first-of-its-kind state-level attempt to extend social protection to app-based gig workers. The law imposes a differential welfare levy of 1–5% on platform payouts, establishes a Gig Workers’ Welfare Board and Social Security Fund, and requires platforms to register workers, issue unique IDs, and report earnings through a digital Payment and Welfare Fee Verification System (PWFVS). While the ordinance aims to formalise precarious labour and guarantee insurance, pensions, and grievance mechanisms, its real-world impact remains uncertain. Platforms may shift the levy to workers via lower commissions or to consumers through higher prices, and compliance costs may disadvantage smaller aggregators, reinforcing market concentration. Governance risks are heightened by reserved seats for platform representatives on the Board, raising the possibility of regulatory capture and tokenistic welfare provision. The law also leaves gaps in coverage for women and part-time or home-based gig workers. Karnataka’s experiment highlights both the promise and perils of subnational innovation in India’s gig economy, underscoring the need for transparent fee-setting, strong oversight, and meaningful worker representation. It also raises broader questions for national policy on harmonising social security for gig labour while balancing platform viability and worker protection.

Corporate governance · Disadvantage · Earnings · Gig economy · Government (linguistics) · Grievance · Payment · Social security · Welfare · COVID-19 Digital Contact Tracing · Digital Economy and Work Transformation · Taxation and Compliance Studies