On 13 February 2026, the Government of Karnataka issued Government Order No. LD 413 LET 2023, enforcing the Karnataka Platform Based Gig Workers (Social Security and Welfare) Act, 2025. This mandates aggregators and platforms to contribute a Gig Workers Welfare Fee on every payout made to gig workers.
The move ensures social security benefits for gig and platform workers, funded through mandatory contributions.
Welfare Fee Rates
| Service Category | Vehicle Type | Rate | Cap |
| Ride-Hailing | 2W | 1% | ₹0.50 |
| Ride-Hailing | 3W | 1% | ₹0.75 |
| Ride-Hailing | 4W | 1% | ₹1.00 |
| Food & Grocery Delivery | 2W | 1% | ₹0.50 |
| Logistics | 2W | 1% | ₹0.50 |
| Logistics | 3W | 1% | ₹0.75 |
| Logistics | LCV | 1% | ₹1.00 |
| Logistics | HCV | 1% | ₹1.50 |
| E-Marketplace | 2W | 1% | ₹0.50 |
| E-Marketplace | 3W | 1% | ₹0.75 |
| E-Marketplace | LCV | 1% | ₹1.00 |
| Professional Activity Providers | Any | 1% | ₹1.50 |
Step-by-Step Compliance Guide for Aggregators
1. Determine Applicability
- Confirm your platform qualifies as an Aggregator or Platform under Section 2 of the Act.
- Identify if your services fall under Schedule-I categories (ride-hailing, food delivery, logistics, e-marketplace, professional services).
2. Automate Fee Calculation
- Integrate backend logic to deduct 1% welfare fee per payout.
- Apply category-specific caps.
- Exclude “settled payments” (tips, incentives, referral bonuses).
3. Quarterly Self-Declaration
- At the end of each quarter:
- Auto-calculate total welfare fee.
- Prepare a standardized self-declaration.
- Submit within 5 working days.
- Remit fee to Labour Department (bank details available on official site).
4. Reporting to Payment and Welfare Fee Verification System[PWFVS]
- Map all gig worker payments to the Payment and Welfare Fee Verification System (PWFVS).
- Submit transaction-wise data (worker ID, payout, fee deducted).
- Until PWFVS is operational, aggregators must self-report quarterly.
5. Data Protection Compliance
- Ensure submissions comply with central and state data protection laws.
6. Documentation & Audit Readiness
- Maintain digital records of transactions, fee payments, and declarations.
- Assign a compliance officer.
- Schedule internal audits quarterly.
7. HR & Legal Alignment
- Update contracts and payout terms to reflect welfare fee deductions.
- Notify gig workers about the welfare fee and its purpose.
- Train HR/legal teams on compliance responsibilities.
Compliance Checklist – FREE
Here’s a ready-to-use FREE checklist for aggregators:
- [ ] Confirm platform classification under the Act.
- [ ] Identify covered services under Schedule-I.
- [ ] Integrate automated fee calculation with caps.
- [ ] Exclude settled payments (tips, incentives, bonuses).
- [ ] Auto-calculate welfare fee quarterly.
- [ ] Submit self-declaration within 5 working days.
- [ ] Remit fee to Labour Department.
- [ ] Map payments to PWFVS (or self-report until live).
- [ ] Ensure compliance with data protection laws.
- [ ] Maintain records for audits.
- [ ] Update contracts and notify workers.
- [ ] Monitor government notifications for updates.
Conclusion
The Karnataka Government’s notification marks a historic step in formalizing social security for gig workers. By mandating welfare fee contributions, the state ensures that digital platforms share responsibility for worker welfare.
For HR professionals, aggregators, and legal advisors, timely compliance is not just a statutory obligation but also a step toward building a sustainable gig economy.
Disclaimer
This blog is intended for informational and educational purposes only. It summarizes the Karnataka Government’s notification on gig workers’ welfare fees. It does not constitute legal advice. Organizations must consult with qualified legal professionals before making compliance decisions. The author and publisher disclaim liability for any reliance placed on this content without professional consultation.