IAMAI seeks clarity on gig worker fund, asks Karnataka to hold welfare fee

Non-profit organisation Internet and Mobile Association of India (IAMAI) wrote to the Karnataka government requesting to put in abeyance the Karnataka Platform Based Gig Workers (Social Security and Welfare) Act, citing the contributions mandated for the aggregators by the Centre and the state do not align.

The IAMAI highlighted that the Code on Social Security, 2020 (CoSS), notified by the Central Government, already mandates that every aggregator contribute between 1 per cent and 2 per cent of its annual turnover towards the social security of gig and platform workers.

It added that simultaneously, the Act mandates a welfare fee of 1 per cent to 5 per cent on payouts made by aggregators to gig workers within Karnataka.

It pointed out that the operational mechanics of such an adjustment was not clear even, with any guidelines, notifications to define the reconciliation mechanism yet to be issued.

This is even as the Act provides that welfare fee payments shall be deemed to satisfy contribution obligations payable under CoSS,

It added that this could lead to aggregators effectively be put under duplicative obligations.

"The IAMAI has accordingly requested the Government of Karnataka to keep financial contributions under the Act in abeyance until alignment between the Government of India and the Government of Karnataka is in place on the mechanism for inter-governmental reconciliation," the organisation said in a statement.

The IMAI also took note of the fact that as of date, no welfare schemes were notified or implemented under the Act.

"Many aggregators already provide insurance coverage through private insurers, with premiums borne by aggregators. As per the IAMAI, commencing mandatory welfare fee contributions without corresponding operational State schemes would risk an unavoidable duplication of financial obligations, and may compel aggregators to discontinue existing private insurance coverage, resulting in unintended gaps in protection for gig workers," the statement added.

The organisation requested that the welfare fee contributions be operationalised only when schemes under the Act are notified and operationalised, and clarity is established on the harmonisation of obligations under the Act and CoSS.

IAMAI claimed that starting contributions prior to resolving these foundational considerations may lead to regulatory uncertainty and potential gaps in worker protection, inconsistent with the shared welfare objectives underlying the Act.