Gig workers’ Act: Karnataka to impose 1 to 1.5% welfare fee on aggregators?

Bengaluru: The state government’s initiative to provide social security to gig workers is expected to kickstart within a week, with the Labour Department likely to fix a uniform welfare fee of 1-1.5% on a per-transaction basis on aggregator platforms.

“We have discussed with stakeholders, who suggested a welfare fee in the range of 1-1.5%. The notification will be out in a week,” Labour Minister Santosh Lad told DH.

Once the process starts and the gig workers’ welfare board is constituted, these contributions will flow into the gig workers’ welfare fund.

According to the Karnataka Platform-based Gig Workers (Social Security and Welfare) Act, a welfare fee in the range of 1-5% can be levied on aggregators on per-transaction basis. According to the Act, the government can specify different percentages on the payout (with or without a cap on the gig worker welfare fee on each transaction) for different categories of aggregators or platforms. 

However, DH has learnt that most of the aggregators have preferred a common welfare fee, prompting the government to opt for a uniform welfare fee.

Pointing to the clause in the act that provides 1-5% welfare fee, Lad told DH that the welfare fee could be increased in the future if need be. 

At the moment, there is no clarity on whether the aggregators will bear the cost themselves or pass it on to customers.

Alongside the welfare fee, the Karnataka Gig Workers’ Social Security and Welfare Fund will include money received as contributions by individual gig workers, grants-in-aid from the Union and state governments. 

The minister explained that an integrated software was being developed to store the details of contributions by the aggregators.

“Wipro has said they will help us. Till the software is developed, there will be an ad-hoc arrangement for the aggregators to pay money,” he added.

Welfare board

The notification will also specify the members of the Gig Workers Welfare Board.

According to the Act, the board comprises 15 members, including five representatives from the government (including the labour minister), four representatives of gig workers, four representative bodies of aggregators and two members from civil society.

There will also be a special invitee, a technical expert in data collection and IT systems.

A list of stakeholders to be nominated as board members has been processed by the department. This list will soon be finalised by Lad, who heads the board.

The board must ensure that the registration of gig workers and aggregator platforms happens as per the provisions of the Act.

The aggregator is expected to provide a database of all its onboarded gig workers to the board, which will then generate a unique ID for all gig workers onboarded on one or more platforms.

“The state law will not have any repugnancy with the code on social security, since the state law is more comprehensive and regulates working conditions, algorithm management, grievance redressal mechanism etc,” Additional Labour Commissioner G Manjunath said.

Karnataka App-based Workers’ Union president Inayat Ali welcomed the move but felt the welfare fee was not adequate. 

“From the beginning, we sought a welfare fee in the range of 2-5%. This is very little. When companies spend so much on public relations, why can’t they increase the welfare fee? We welcome the move, but there needs to be an amendment in the coming days,” he added.