Social Security for Gig Workers in India: Do Central and State Laws Signal Higher Costs for Online Platforms

The Code on Social Security, 2020 (“SS Code”) and the Draft Social Security Code (Central) Rules, 2025 (“Draft SS Rules”) bring gig and platform workers within the social security framework. In parallel, some states, most notably Karnataka and Rajasthan, have already enacted gig-specific legislations, creating an additional layer of obligations for aggregators. 

For several online platforms the combined effect may not involve merely additional compliance; but inter alia it may alter how engagement is tracked, how contributions are calculated, and how costs accumulate across jurisdictions.

Central framework

The SS Code, among other things, establishes the funding obligation for aggregators. The Central Government may notify a contribution rate of one percent (1%) to two percent (2%)of the aggregator’s annual turnover (for specified categories of aggregators). 

Separately, under Rule 49(2)(e) of the Draft SS Rules, a worker becomes eligible for social security benefits if, in the preceding financial year, he/she has:

(i) completed ninety (90) days of engagement with a single aggregator; or

(ii) completed one hundred and twenty (120) days of engagement in aggregate with multiple aggregators.

The Draft SS Rules further provide that where a worker is engaged with more than one (1) aggregator on the same calendar day, each such engagement with the aggregator is counted as a separate day of engagement.As a result, engagement with three (3) aggregators on a single day is treated as three (3) qualifying days.

This framework creates a disconnect between calendar days actually worked and days counted for determining eligibility for contribution. Resultantly, a worker with limited, sporadic activity across multiple platforms may become eligible for benefits faster than a worker engaged consistently with a single aggregator.

State framework

The central framework does not operate in isolation. Karnataka and Rajasthan among other States, have also introduced transaction-linked welfare fee regimes for platform-based gig workers, creating additional obligations alongside the central framework.

In Karnataka, aggregators must pay a Platform-Based Gig Workers Welfare Fee between one percent (1%) and five percent (5%) of the payout to the worker per transaction, with rates varying across categories of platforms and payable quarterly. The fee is intended to count towards the contribution payable under the SS Code, with any difference subject to reconciliation.

Similarly, Rajasthan has adopted a similar approach, requiring a welfare fee calculated as a percentage of the value of each transaction involving a platform worker (excluding taxes). However, the detailed rules, including rates, timelines, eligibility criteria, and operational mechanics, are yet to be notified. Notably, unlike Karnataka, Rajasthan does not clarify whether contributions under the state framework will be adjusted against that under the central framework.

Further, insofar as eligibility conditions are concerned, the state laws do not prescribe any ‘per-day engagement-based threshold’ comparable to that under the Draft SS Rules. Accordingly, the ambiguity relating to the counting of engagement days appears to arise only under the central framework and is not expressly contemplated under the current state welfare legislations.

Practical Considerations

This may create several practical challenges for platforms as they operate across several States:

(i) There is no explicit guidance on whether payments made under all state laws will be adjusted against central obligations, creating a potential risk of higher contributionobligation;

(ii) The basis of contributions differ across regimes, with state laws such as those in Karnataka and Rajasthan levying fees on each transaction, while the central framework links contributions to the aggregator’s annual turnover;

(iii) It remains unclear how eligibility will be determined in practice, including how engagement days are to be counted and how multi-platform activity is to be treated;

(iv) Uncertainty as to whether and how cross-platform engagement will be tracked and verified, and what data-sharing responsibilities may arise between aggregators; 

(v) Inflated counting of engagement days could lead to earlier eligibility and contribution liability even where actual hours worked or earnings remain limited; and

(vi) Compliance burden as states prescribe different rates, timelines, reporting formats, and compliance processes, all layered on top of central requirements.

Why platforms should engage early

The government has indicated an intention to operationalize the Labour Codes around April 01, 2026, yet critical aspects of the framework governing gig workers remain unsettled such as:

(i) Ambiguity involving social security schemes for gig workers;

(ii) Lack of clarity regarding mechanism for distributing funds from the social security pool;

(iii) Final central rules yet to be notified; and

(iv) States proceeding with their own models, with different contribution rates, timelines, and related aspects.

If central and state frameworks evolve in parallel without clear alignment, platforms could possibly face a structurally complex regime in which:

(i) Eligibility for benefits is determined under multiple sets of rules;

(ii) Contributions are collected under multiple regimes;

(iii) Overall rise in operating costs;

(iv) Adjustment mechanisms are uncertain or absent; and

(v) Increase and complexity in compliance obligations across jurisdictions.

Evaluating these issues at an early stage allows platforms to identify pressure points, test assumptions, and prepare for compliance alignment once the final Rules are notified under the SS Code.

Disclaimer: The contents of the above publication are based on interpretation, analysis and understanding of applicable laws and updates in law, within the knowledge of the authors. Readers should take steps to ascertain the current developments, given the everyday changes that may be occurring in India and internationally on the subject covered hereinabove. This is not a legal opinion, analysis, or interpretation. This is an initiative to share developments in the world of law, or as may be relevant for a reader. No reader should act on the basis of any statement made above without seeking professional and up-to-date legal advice.