The Government of Karnataka, on February 13, 2026, mandates the collection of a Welfare Fee from aggregators and platforms to fund social security for gig workers.
- The fee is levied on final payouts made to gig workers by platforms/aggregators.
- As per Section 20, the welfare fee must be not less than 1% and not more than 5% of payouts, with specific rates notified by the State Government.
- The Government Order dated 13 February 2026 enforces immediate collection of welfare fees at prescribed rates, until further orders.
Applicable Categories & Rates
| Category | Mode | Welfare Fee | 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 |
Compliance Mechanism
- 1% Welfare Fee: Effective immediately, a 1% fee is applicable on all gig worker payouts, subject to transaction caps
- Quarterly payment of welfare fee within 5 working days of quarter-end.
- PWFVS Integration: All payouts must be mapped to the state’s Payment and Welfare Fee Verification System (PWFVS). Until the portal is fully operational, self-reporting is permitted.
- Exclusions: Tips, ex-gratia/event-based/special payments, referral fees, incentives.
- Bank details for remittance will be provided on the Labour Department website.
Applicable Employers’ Action Plan
- Mandatory Registration: Platforms must register with the Gig Workers Welfare Board within 45 days of the Act/Board’s commencement.
- Worker Database: Submit a machine-readable database of all onboarded gig workers within 45 days.
- Quarterly Remittance:
- Calculate and self-declare the welfare fee within 5 working days of the end of each quarter.
- Remit the amount through RBI-approved banking channels as per details on the Labour Department website. (Details awaited)
- Transparency & Contracts: Update worker contracts to include clear terms on payments and deductions, providing 14 days’ notice for any material changes.
Grievance Redressal: Establish an Internal Dispute Resolution Committee (IDRC) to handle worker grievances within 14–15 days.