Introduction

The rise of the gig economy has redefined work in 21st-century India. Urban consumers now depend on a rapidly growing workforce of app-based drivers, food delivery workers, and service professionals to meet every day needs. Yet, while these workers power India’s digital convenience economy, they remain largely excluded from the country’s formal legal protections. The result is a troubling disconnect between the rights they need and the laws currently in place.
At the heart of this issue lies a fundamental legal question: Can India’s existing labor laws, built around traditional employer-employee models, accommodate the realities of gig and platform work? The answer, as it stands today, is uncertain—and this legal grey zone continues to leave millions of gig workers without adequate protections.

The Existing Legal Framework and Its Shortcomings

India’s first major attempt to recognize unorganised workers came with The Unorganised Workers’ Social Security Act, 2008, which aimed to provide social security to home-based, self-employed, and wage workers. The Act mandates worker registration to access benefits such as life insurance, health care, and maternity support. However, gig workers especially those working through apps—have largely been excluded from its ambit.In the case of, Indian Federation of App-Based Transport Workers (IFAT) v. UOI filed a public interest litigation before the Supreme Court, demanding recognition of gig workers as “unorganised workers” under the 2008 Act. The petition argued that their exclusion violates Articles 14, 21, and 23 of the Constitution, which safeguard equality before law, the right to live with dignity, and protection from exploitation. IFAT also invoked Directive Principles under Articles 39(e), 41, and 42, which urge the state to secure just and humane working conditions and ensure the health and welfare of workers. The COVID-19 pandemic made the precarity of gig workers painfully clear. Workers lost incomes, faced harassment from authorities, had their vehicles seized over unpaid EMIs, and were left without healthcare or safety nets. The PIL demanded economic relief—₹1,175 per day for drivers and ₹675 per day for other gig workers—as well as protections from debt-related seizures.
A step toward addressing these gaps came with the Code on Social Security, 2020, part of India’s broader labor law consolidation effort. The Code formally introduces definitions for “gig workers” and “platform workers” under Sections 2(35) and 2(60), marking a crucial shift from binary notions of employment. However, recognition alone does not guarantee rights. While Section 113 mandates the registration of such workers to access benefits like health care and income protection, implementation remains sluggish. The e-Shram portal, launched in 2021 to enable registration, has yet to meaningfully integrate gig workers on a large scale.
Another key feature is the creation of a Social Security Fund, financed by contributions from central and state governments and digital platforms. Aggregators like Swiggy and Uber are expected to contribute 1–2% of their turnover, capped at 5% of what they pay workers. But questions remain about the adequacy of such funding and how benefits will be delivered on the ground. Moreover, the Code fails to provide core protections such as collective bargaining rights, job security, or mechanisms to resolve disputes. Its ambiguous distinction between gig and platform workers also raises administrative challenges and could complicate implementation.

Karnataka’s Bold Step: A New Model for Reform

Where the central legislation falters, Karnataka’s Platform-based Gig Workers (Social Security and Welfare) Bill, 2024 takes a more decisive approach. The Bill—expected to be enforced through ordinance—goes beyond mere recognition and places concrete obligations on digital platforms. Unlike the Social Security Code, Karnataka’s law mandates a transaction-based welfare fee of 1% to 5% on each payment to gig workers, to be deposited into a state-managed Welfare Fund. It also proposes a Gig Workers’ Welfare Board with broad powers to register workers, design welfare schemes, and monitor platform compliance. Crucially, the Bill introduces a Payment and Welfare Fee Verification System (PWFVS), which ensures transparency in contributions and disbursements—an administrative innovation sorely needed in Indian welfare delivery.
The Karnataka Bill also introduces employment-like protections without redefining the employment relationship. Platforms must now issue written contracts, provide 14 days’ notice before termination, and justify dismissals. These safeguards protect workers from arbitrary removal, addressing the severe power imbalance between platforms and workers. Another notable feature is algorithmic accountability. Given that gig workers’ pay, ratings, and workloads are often determined by opaque algorithms, the Bill mandates transparency in these systems. This aligns with global legal trends focused on digital rights and data fairness, ensuring workers understand how decisions affecting them are made.
The Bill further sets up a two-tier dispute resolution system, with an Internal Dispute Resolution Committee (IDRC) at the platform level and the Gig Workers’ Welfare Board serving as an appellate body. This mechanism ensures accessible justice—something traditional labor tribunals rarely offered to gig workers. Trade unions have welcomed the Bill as a breakthrough. The IFAT called it a “historic moment” and urged other states to replicate the model. Legal experts view Karnataka’s approach as a blueprint for reforming the Social Security Code at the national level.

Conclusion

India’s labor law is at a critical juncture. The gig economy is no longer marginal and it is mainstream. The Code on Social Security, 2020 laid the foundation, but it is the Karnataka Bill that offers a practical path forward. Now, the challenge is to scale these protections nationally and enforce them effectively. Gig workers are not simply independent contractors and they are indispensable drivers of India’s digital economy. As such, the law must recognize them as rights-bearing participants in the workforce. The courts, Parliament, and state governments must act together to ensure that the legal system evolves and not just to catch up with the future of work, but to shape it.