Karnataka HC directs Swiggy, Zomato, Zepto and others to deposit gig workers' welfare fee within 3 weeks
Refusing to grant an interim stay on the Karnataka Gig Workers Welfare Act, the Karnataka High Court has directed Swiggy, Zomato, Zepto and other app-based aggregators to deposit the disputed welfare fee with the court within three weeks.
- Jul 4, 2026,
- Updated Jul 4, 2026 10:05 AM IST
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 app-based platforms challenging the law to deposit the disputed welfare fee with the court registry within three weeks.
The interim order, passed by Justice M Nagaprasanna on Friday, came while hearing petitions filed by the Internet and Mobile Association of India (IAMAI) and several platform companies, including Eternal Ltd (which operates Zomato and Blinkit), Swiggy, Zepto, Urban Company and Valmo Transportation. The petitioners have challenged the constitutional validity of the state law and the rules framed under it.
To balance the interests of the platforms, the state government and gig workers, the court directed that the welfare fee be deposited with the court instead of being paid to the state government. It also restrained the government from taking coercive action against the petitioners as long as they comply with the interim directions. The matter has been listed for further hearing on July 31, with the state directed to file its objections by July 30.
The argument
The petitioners argued that Karnataka's law overlaps with Parliament's Code on Social Security (COSS), 2020, which already provides a national framework for social security covering gig and platform workers. They contended that the state legislation is repugnant to the central law under Article 254 of the Constitution and creates duplicate financial and regulatory obligations for aggregators.
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They also argued that contributions by aggregators are already envisaged under Section 114(4) of the Code on Social Security and are meant to be credited to the Social Security Fund. According to the companies, Karnataka has introduced an additional levy without notifying any welfare schemes for gig workers, raising concerns over the utilisation of the funds.
What the state law say
Under the Karnataka law, aggregators are required to contribute welfare fees capped at 50 paise for every two-wheeler ride, 75 paise for three-wheeler trips and Re 1 for four-wheeler rides. Food and grocery delivery services are also subject to a 1% levy on payouts, with the collections intended to finance welfare measures through the Karnataka Platform-Based Gig Workers Welfare Board.
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Appearing for the Centre, Additional Solicitor General Aravind Kamath argued that the state legislation directly conflicts with the Code on Social Security and therefore falls foul of Article 254. Defending the law, Karnataka Advocate General Shashikiran Shetty maintained that there is no inconsistency between the two legislations and said the state Act merely supplements the central framework. He also pointed out that similar laws have been enacted by states such as Rajasthan, Bihar and Telangana.
During the hearing, Justice Nagaprasanna questioned the state government on its roadmap for utilising the welfare fund and sought details of the schemes that would benefit gig workers. The judge orally observed that if platforms are charging significantly more from consumers, workers delivering in difficult conditions should also receive their due benefits. At the same time, the court emphasised that welfare collections should not be diverted for unrelated purposes and asked the state to submit a comprehensive statement detailing the proposed utilisation of the funds before the next hearing.
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 app-based platforms challenging the law to deposit the disputed welfare fee with the court registry within three weeks.
The interim order, passed by Justice M Nagaprasanna on Friday, came while hearing petitions filed by the Internet and Mobile Association of India (IAMAI) and several platform companies, including Eternal Ltd (which operates Zomato and Blinkit), Swiggy, Zepto, Urban Company and Valmo Transportation. The petitioners have challenged the constitutional validity of the state law and the rules framed under it.
To balance the interests of the platforms, the state government and gig workers, the court directed that the welfare fee be deposited with the court instead of being paid to the state government. It also restrained the government from taking coercive action against the petitioners as long as they comply with the interim directions. The matter has been listed for further hearing on July 31, with the state directed to file its objections by July 30.
The argument
The petitioners argued that Karnataka's law overlaps with Parliament's Code on Social Security (COSS), 2020, which already provides a national framework for social security covering gig and platform workers. They contended that the state legislation is repugnant to the central law under Article 254 of the Constitution and creates duplicate financial and regulatory obligations for aggregators.
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They also argued that contributions by aggregators are already envisaged under Section 114(4) of the Code on Social Security and are meant to be credited to the Social Security Fund. According to the companies, Karnataka has introduced an additional levy without notifying any welfare schemes for gig workers, raising concerns over the utilisation of the funds.
What the state law say
Under the Karnataka law, aggregators are required to contribute welfare fees capped at 50 paise for every two-wheeler ride, 75 paise for three-wheeler trips and Re 1 for four-wheeler rides. Food and grocery delivery services are also subject to a 1% levy on payouts, with the collections intended to finance welfare measures through the Karnataka Platform-Based Gig Workers Welfare Board.
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Appearing for the Centre, Additional Solicitor General Aravind Kamath argued that the state legislation directly conflicts with the Code on Social Security and therefore falls foul of Article 254. Defending the law, Karnataka Advocate General Shashikiran Shetty maintained that there is no inconsistency between the two legislations and said the state Act merely supplements the central framework. He also pointed out that similar laws have been enacted by states such as Rajasthan, Bihar and Telangana.
During the hearing, Justice Nagaprasanna questioned the state government on its roadmap for utilising the welfare fund and sought details of the schemes that would benefit gig workers. The judge orally observed that if platforms are charging significantly more from consumers, workers delivering in difficult conditions should also receive their due benefits. At the same time, the court emphasised that welfare collections should not be diverted for unrelated purposes and asked the state to submit a comprehensive statement detailing the proposed utilisation of the funds before the next hearing.