The Karnataka High Court on Friday declined to stay the implementation of a state law aimed at providing social security to gig workers, directing major digital aggregators to deposit their quarterly welfare fees with the court registry within three weeks.
While refusing to grant an interim stay on the legislation, the bench of Justice M. Nagaprasanna protected platforms such as Zomato, Swiggy, Blinkit, and Zepto from immediate state action. The court directed the Karnataka government not to take any coercive measures against the platforms until the next hearing on July 31. Under Section 21 of the Act, companies faced potential interest charges or penal action if they missed the state’s July 5 deadline to deposit the welfare fees.
The court rejected a request from the Internet and Mobile Association of India (IAMAI)—the umbrella body representing the app-based service providers—to submit bank guarantees instead of cash. The platforms’ legal counsel had argued that cash deposits would negatively affect their profit and loss statements. However, the bench ruled that the payments represent a statutory obligation rather than charity, concluding that depositing the second-quarter fees with the court registry was necessary to balance the interests of the platforms, the state, and the workers.
Passed in August 2025, the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Act is expected to cover approximately four lakh gig workers across the state. Under the law, platforms are required to pay a quarterly fee of 50 paise for every two-wheeler trip, 75 paise for three-wheeler trips, and one rupee for four-wheeler trips to a state-appointed welfare board.
Conflict With Central Legislation
In its petition challenging the constitutional validity of the state law and its rules, the IAMAI argued that the state legislation infringes upon federal authority. Senior Advocate Dhyan Chinnappa, representing the platforms, stated that the federal government’s Code on Social Security, 2020 (COSS) already addresses the welfare of unorganized and gig workers. He argued that because the federal code is exhaustive, states cannot enact overlapping laws that force platforms to register and pay welfare fees to both central and state entities.
Additional Solicitor General Aravind Kamath supported the petitioners’ stance, arguing that the state law directly conflicts with the federal code and is therefore invalid under Article 254 of the Indian Constitution, which establishes the supremacy of central laws over state legislation in cases of conflict.
State Government Defends Legislation
Defending the state’s legislative authority, Advocate General Shashi Kiran Shetty argued that there is no conflict between the state Act and the central code. He noted that other states, including Rajasthan, Telangana, and Bihar, enacted similar welfare laws for gig workers between 2023 and 2024, promising to present details on how those states have implemented their programs at the next hearing.
Judicial Push For Worker Welfare
During the proceedings, the bench criticized the platforms’ reluctance to pay the welfare fees. Justice Nagaprasanna questioned why companies that charge customers up to 40 percent above maximum retail prices could not pay a small fee to support delivery workers who perform their duties under all weather conditions.
The bench remarked that both the central and state legislations originated from a shared objective of securing social justice for gig workers and delivery staff. The court suggested exploring a harmonious interpretation that would allow both statutes to function side-by-side for the benefit of the workers. The state government has been directed to submit a comprehensive statement of objections before the next hearing on July 31.
