Karnataka HC refused to stay the state's Gig Workers Act, ordering Swiggy, Zepto, and others to deposit welfare contributions. This ruling forces platforms to comply with a 1% transaction fee, even as they challenge the law's constitutional validity. The fight boils down to whether state laws can overlap with the Centre's social security framework for gig workers.
How We Got Here
The Karnataka Platform-Based Gig Workers Act, 2025, mandates a 1% welfare fee on platform transactions to fund gig worker social security. IAMAI, along with Zomato (Eternal), Swiggy, Zepto, and Urban Company, challenged the law in June 2026, arguing it duplicates the Centre's Code on Social Security, 2020.
The Numbers
- The High Court granted interim protection, preventing coercive action against petitioners if they deposit the fee.
- Platforms must deposit the welfare contribution for the April-June quarter with the HC within three weeks of the July 3, 2026 ruling.
- The Karnataka government must file its objections to the petition by July 30, 2026.
- The next hearing for the case is scheduled for August 14, 2026.
- Petitioners include Meesho's logistics arm, Valmo, alongside major players like Swiggy and Urban Company.
What Happens Next
🇮🇳 Why This Matters for India
For the thousands of gig workers in logistics and urban services across Bengaluru and Mumbai, this fund collection could eventually provide tangible social security benefits.
The Take
The immediate winners are Karnataka's gig workers, getting a clear path to social security funding, while platforms face increased operational costs and a muddled regulatory landscape between state and central laws. This sets a tricky precedent of forced compliance for a law still under constitutional challenge.
Source:
Inc42 ↗