Gig Workers Bill Could Impact Business Ease, Start-Ups Tell Karnataka Govt

Several tech start-ups and unicorns have expressed concerns about the Karnataka government's proposed bill for platform-based gig workers. This is as per a report by Business Standard. 

The group reportedly informed the state government that the bill, in its present form, would hinder business operations, complicating the ease of doing business. Further, it will increase the regulatory and compliance burden on the emerging gig and start-up sectors. 

The draft of the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Bill, 2024, intends to provide welfare and social security for gig workers in Karnataka. The tech start-ups and unicorns, which reportedly include Swiggy, Ola, Zomato, Uber, Urban Company, and Amazon, submitted their objections to the government through industry bodies such as the Confederation of Indian Industry (CII), the National Association of Software and Service Companies (Nasscom), and the Internet and Mobile Association of India (IAMAI). 

Read: Nasscom, IAMAI Flag Key Issues in Karnataka Gig Workers Bill

While raising objections regarding the gig workers bill, in a letter to the government, Nasscom highlighted, “A key feature of a gig worker is being an ‘independent contractor’ and not an employee because of the absence of elements like degree of control, commitment, and accountability. However, the bill does not examine these elements and instead proposes a presumption that gig workers are like employees.” 

Meanwhile, the IAMAI, in its submission, highlighted, “The draft bill proposes that the welfare fee contribution would be calculated either as a percentage of a gig worker’s pay per transaction or on the annual state-specific turnover of the aggregator as may be notified by the state government... This ambiguity in calculation leads to significant confusion.” 

The start-up and IT companies have reportedly asked the government to remove this part in the interest of ease of doing business, while emphasizing that the government's power of inspection is ambiguous and broad. 

Speaking to Business Standard, an industry tech executive said, “The Karnataka Bill introduces wide-ranging powers of inspection to the state government, including algorithms, contracts, and the day-to-day operations of platforms. This is akin to the Inspector Raj system of the 70s and 80s and goes against the spirit of the Labour Codes and ease of doing business.”