Food delivery and ecommerce platforms must deposit the disputed welfare fee with the court registry within three weeks as the High Court examines the constitutional validity of Karnataka’s gig workers welfare law
The Karnataka High Court has refused to stay the implementation of the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Act, 2025, while directing food delivery and ecommerce platforms, including Zomato, Swiggy, Blinkit and Zepto, to deposit the disputed welfare fee for the second quarter with the court registry within three weeks.
The interim order was passed by Justice M Nagaprasanna on 3 July while hearing petitions filed by the Internet and Mobile Association of India (IAMAI) and several platform aggregators challenging the constitutional validity of the Act and the Rules framed under it.
The petitioners argued that the Karnataka legislation is repugnant to the Centre’s Code on Social Security, 2020, and is therefore unconstitutional under Article 254 of the Constitution, which deals with inconsistencies between Central and state laws.
Court Seeks Balance
In an interim arrangement, the High Court directed that the welfare fee be deposited with its registry instead of being remitted to the state government, saying the measure would protect the interests of the platforms, the government and gig workers until the matter is decided.
The court directed the Karnataka government to file its objections by 30 July and listed the matter for further hearing on 14 August.
It also said no coercive action would be initiated against the petitioners as long as they comply with the interim directions. However, the court rejected the platforms’ request to furnish an unconditional bank guarantee in lieu of depositing the welfare fee.
During the hearing, the bench observed that although the Central legislation appears to occupy the field of social security, it would examine whether the Karnataka law could coexist with the Central law through a harmonious interpretation.
The court orally remarked that it would consider whether the state legislation could supplement the central law if it offers greater benefits to gig workers.
Levy Under Challenge
The Karnataka government defended the levy, stating that it is exclusively meant to finance welfare measures for gig workers. Under the Act, the welfare fee is capped at 50 paise per two-wheeler ride, 75 paise per three-wheeler ride and Rs 1 per four-wheeler ride. Food and grocery deliveries are also subject to a 1 per cent welfare levy.
The petitioners, however, argued that the levy would adversely impact their profit-and-loss accounts. They also contended that the government has not yet notified any welfare scheme for the utilisation of the funds collected.
Apart from challenging the parent legislation, the petitions also question the validity of the 27 January 2026 notification constituting the Karnataka Platform-Based Gig Workers Welfare Board, the 13 February 2026 notification operationalising the welfare fee mechanism and the 21 May 2026 notice directing platforms to establish Internal Dispute Resolution Committees.
