The Karnataka High Court declined to halt the enforcement of the Karnataka Platform-Based Gig Workers Act, 2025, and directed platform companies to deposit the second-quarter welfare fee with the court registry within three weeks.
IAMAI and platform aggregators argue the state law conflicts with the Centre's Code on Social Security, 2020, making it unconstitutional under Article 254 of the Constitution.
The court granted protection from coercive action subject to compliance, asked the state to file its objections by July 30, and fixed the next hearing for August 14.
Karnataka HC Refuses to Stay Gig Workers Act, Orders Swiggy, Zomato, Zepto to Deposit Welfare Fee
The Karnataka High Court has declined to stay the state's gig workers law while directing platform companies to deposit the disputed welfare fee with the court registry
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Summary
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The Karnataka High Court refused to halt the enforcement of the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Act, 2025, on July 3. Justice M Nagaprasanna directed food delivery and e-commerce platforms—including Zepto, Blinkit, Swiggy and Zomato—to deposit their second-quarter welfare fees with the court registry within three weeks.
Moneycontrol reported the development. The interim order was passed during hearings of petitions filed by the Internet and Mobile Association of India (IAMAI) and platform aggregators challenging the constitutional validity of the Act and the Rules framed under it.
Constitutional Conflict Argued
The petitioners argue the state legislation conflicts with the Centre’s Code on Social Security, 2020, making it unconstitutional under Article 254 of the Constitution.
To balance the interests of the platforms, the state government and gig workers, the court directed that the disputed welfare fee be deposited with the court registry rather than paid to the state government.
The bench rejected the platforms' request to furnish an unconditional bank guarantee instead of depositing the cash amount.
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No coercive action will be taken against the petitioners as long as they comply with these interim directions. The court ordered the state government to file its objections by July 30 and scheduled the next hearing for August 14.
Harmonious Interpretation Explored
During the proceedings, the bench observed that while the Centre's social security legislation appears to cover the field, it will examine whether the state can provide additional welfare benefits through a harmonious interpretation of both laws.
Nagaprasanna orally remarked that the court would consider whether the state legislation could supplement the central law if it offers greater benefits to gig workers. This exploration aims to resolve the legal overlap between the state and central frameworks.
Fee Structures Challenged
The state government stated that the welfare fee, capped at 50 paise per ride for two-wheelers, 75 paise for three-wheelers and Rs 1 for four-wheelers, along with a 1 per cent levy on food and grocery deliveries, is intended solely for the welfare of gig workers.
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The petitioners contend the levy hurts their profit-and-loss accounts, arguing that no welfare scheme has yet been framed to disburse the collected funds.
The petitions challenge the January 27, 2026 notification constituting the Karnataka Platform-Based Gig Workers Welfare Board. They also challenge the February 13 notification operationalising the welfare fee mechanism and the May 21 notice directing platforms to establish Internal Dispute Resolution Committees.