The Draft Telangana Gig and Platform Workers (Registration, Social Security, and Welfare) Bill, 2025
Key Features A gig worker operates outside of a traditional employer-employee relationship, while a platform workers sources work through a digital platform.  All such workers will be registered with the Gig and Platform Workers Welfare Board with a unique ID.  The Board will implement social security schemes that are notified by the state government.   A Social Security and Welfare Fund will be established.  Aggregators and platforms will be charged a Welfare Fund Fee. Platform and gig workers can seek information from aggregators about the automated monitoring and decision making system which determines fares, earnings, and customer feedback.	Key Issues and Analysis The definition of gig worker may cover a wide range of workers.  This may lead to classification of or certain contractual workers as gig workers. The proposed model of social security funding includes contributions from the government, gig and platform workers, and platforms and aggregators.  This raises a question around who should bear the primary responsibility for funding these benefits. The Bill does not specify the welfare entitlements for gig and platform workers or the factors used for determining the welfare payouts.
The Draft Bill was circulated by the Labour Department, Government of Telangana, on April 15, 2025.  It seeks to regulate gig and platform work, and ensure protection of such gig workers.

PART A: HIGHLIGHTS OF THE DRAFT BILL

The platform and gig economy has witnessed rapid growth in recent years due to increased adoption of digital platforms that facilitate on-demand service delivery.  Gig workers are primarily those engaged in work outside of a traditional employer-employee relationship.[1]  Niti Aayog had estimated that in 2020-21, there were 77 lakh workers engaged in the gig economy in India.1  This is expected to increase to 2.35 crore by 2029-30.1  As of January 2022, Telangana had 10,536 gig and platform workers registered on the e-Shram portal.[2]  E-shram portal was launched in 2021 to create a database of unorganised workers across sectors (including gig workers) to facilitate social security benefits.

In 2020, Parliament passed the Code on Social Security, 2020 which provides for regulation of gig and platform work.[3]  According to the Code, a gig worker refers to a worker outside the traditional employer-employee relationship.  A platform worker is also defined as a worker outside a traditional employer-employee relationship accessing work through an online platform.  The Code provides for the constitution of a National Social Security Board to recommend and monitor social welfare schemes for gig, platform, and unorganised workers.  The Union government announced healthcare coverage for gig-workers under the PM Jan Arogya Yojana and registration on the e-Shram portal under the 2025-26 union budget.[4]  In 2019, the Union government introduced the PM Shram Yogi Maan-dhan Yojana which is an old age pension scheme for unorganised workers including gig and platform workers.[5] 

A few states have introduced or are planning to introduce laws to regulate gig and platform work.  In 2023, Rajasthan passed the Rajasthan Platform Based Gig Workers (Registration and Welfare) Act, 2023.[6]  Karnataka and Jharkhand have circulated draft Bills to regulate gig work.[7]^,[8]  These Bills provide for registration of gig workers and aggregators, and establish a Welfare Board and Fund to implement welfare schemes.  The Labour Department of Telangana also circulated a draft Bill on April 15, 2025 for public comments.

Key features of the draft Bill include:

• Gig worker:  A gig worker is a person who participates in a work arrangement outside of a traditional employer-employee relationship including piece-rate work.  The work results in payment based on the terms and conditions in the contract.  A platform worker is a person engaged through an online system.
• Aggregator:  An aggregator is a digital intermediary or a marketplace connecting a buyer or user of a service to the seller or provider of the service.  This also includes entities who coordinate between multiple aggregators.  Services covered under the draft Bill include ride sharing, food delivery, logistics, professional services providers, healthcare, travel and hospitality.  The government can notify changes in this list.
• Gig and platform workers welfare board:  The state government will constitute a Gig and Platform Workers Welfare Board.  The Board will have the Minster of Labour as the Chairperson and a CEO as the Secretary.  Functions of the Board include:  (i) registering workers and aggregators, (ii) monitoring the collection of the welfare fund fee, (iii) implementing and overseeing social security schemes, (iv) assisting workers in accessing social security benefits, and (v) obtaining workers data from aggregators.
• Social Security and Welfare Fund:  The state government will establish a Social Security and Welfare Fund for gig and platform workers.  The government will levy a Gig and Platform Workers Welfare Fund Fee on the aggregators and platforms.  This will be calculated as 1% to 2% of the payout to gig workers in each transaction.  The Fund will be financed through sources such as:  (i) welfare fund fee, (ii) contributions made by individual workers towards specific schemes, and (iii) grants from the central and state government.  The state government will also set up and administer a Welfare Fund Fee Verification System to track all payments made to gig workers by platforms.  Details of the welfare fund fee collected by the government and spent will be disclosed and made available on the system.  The Welfare Board will monitor this system. 
• Rights of Platform and Gig Workers:  The gig and platform workers will have a right to register with the state government on joining any platform regardless of the duration of their work.  Upon registration they will be provided with a unique ID valid across all platforms.  The gig workers will have a right to access a grievance redressal mechanism and access to social security schemes.  
• Responsibilities of aggregators:  The aggregators must register themselves with the Board and provide the Board the database of all the gig and platform workers registered with them.  Aggregators will also be required to update the worker data on the Board quarterly.  The draft Bill also requires aggregators to set up a designated Point of Contact to handle worker inquiries on their platforms. 
• Income security and working conditions:  Aggregators must mandatorily make payments as per the contracts without any delays and must inform workers of any deductions in payments.  Aggregators must ensure that the working environment is safe and in adherence with the occupational safety and health standards.  
• Termination of work:  An aggregator may terminate a worker only after following principles of natural justice with a due enquiry.  Termination would also require a valid reason in writing and a seven days’ notice.  Immediate termination is permitted only if there is a foreseeable physical or mental threat to the end consumer.
• Grievance redressal:  Aggregators with at least 100 workers must establish an Internal Dispute Resolution Committee to handle disputes against aggregators and platforms.  The government will appoint a Grievance Redressal Officer who will be required to conduct an enquiry and issue an order within 30 days.  An Appellate Authority will also be appointed which will allow for appeals against the Grievance Redressal Officer. 
• Offences and penalties:  Failure to pay a welfare fund fee by the aggregator/primary employer shall be punishable with imprisonment for up to one year, or a fine of up to two lakh rupees, or both.  In addition, failure to submit any documents required under the Bill will be punishable with a fine of up to Rs 50,000.

 

PART B: KEY ISSUES AND ANALYSIS

Definition of gig worker may cover a wide range of workers

The draft Bill defines a gig worker as a person who: (i) falls outside a traditional employer-employee relationship, (ii) works on the basis of terms and conditions specified in the contract, and (iii) is paid per output.  A platform worker is a person undertaking work through an online platform.  The draft Bill will apply to every gig and platform worker registered with the Board.  While the definition of platform worker is restricted to work obtained through electronic platforms, the definition of a gig worker casts a much wider net.  A gig worker may include a wide range of persons who may not be doing what is typically understood to be gig work (see section below).  For example, this may include: a graphic designer hired by an organisation on contract basis and paid for a project, a performer contracted for an event, seeking the opinion of a doctor whose services were employed using a medical aggregator.  Thus, all persons employing such workers will be liable to pay a welfare fee, and the social security schemes for gig workers will cover all such workers.

Challenges in defining gig work

The rise of digital platforms in recent years has changed how products and services are accessed and delivered, leading to an expansion of gig-based employment.  Finding and performing jobs through such platforms is known as gig work.[9]  However, a challenge with defining and regulating gig work is that it includes aspects of traditional employer-employee roles, contract work, and freelance work, all of which are regulated differently (see Table 1).  The International Labour Organisation (2021) noted that the line between employment and self-employment has blurred due to technology.[10] 

Certain features that distinguish gig work from traditional employment models include:  (i) gig workers may enjoy flexibility in their work, (ii) employers may not exert sufficient control over the work, and (iii) there may not be a mutual obligation between the parties involved.[11]  The draft Bill’s definition of gig work does not clearly provide for all these conceptual features.  This may lead to lack of clarity on who is a gig worker.

There have been cases where contractual obligations placed on gig and platform workers by companies were found to be similar to the ones placed on traditional employees.  For instance, the UK Supreme Court observed that Uber (a ride sharing company) exerts significant control on travel routes and fares.[12]  It also deactivates a driver’s account if they do not accept specified number of rides.  Consequently, the Court ruled that Uber drivers are workers, and not self-employed contractors.12  Similarly, in September 2024, the Karnataka High Court ruled that drivers using Ola (a ride sharing company) would be considered employees of the company.[13]  The Court observed that the company controls all the aspects of the services including the fare, the route, and the devices used by the gig worker.13

Table 1: Comparison between different forms of work[14]^{,[15],[16],[17]}

Parameters	Employer-Employee	Contract labour	Freelance work	Gig work
Engagement for employment	Employment under a written contract, on a permanent basis.	Engaged through a contractor/ agency, on negotiated terms.	Engaged through online platforms, social media, referrals or directly.	Engaged through platforms, on terms negotiated with the aggregator.
Worker flexibility	No flexibility in choosing location of work, projects and working hours.	Limited flexibility in terms of deadlines, may choose their working hours (if not in a specific hourly role).	Flexibility to build a client base on their own.  Can choose their working hours, pay and projects.	Can choose their working hours, location, projects.  Platform may put constraints like performance ratings, commission, penalties.
Control by the employer	Direct control by employer, as per the employment agreement.	Supervisory control of the employer.  Contractor has ultimate control.	Minimal control by the client.	Ways of control include: (i) performance ratings, (ii) pricing system, and (iii) keeping location on during work hours.
Primary source of income for employee/ worker	Remuneration by employer.  Employees cannot work for competitors.	Can have multiple sources of income, if part-time contract.	Multiple sources of income from different projects.	Can have multiple sources of income if engaged with multiple platforms.

Sources: Contract Labour Act, 1970; Industrial Disputes Act, 1947; IAAI vs. International Air Cargo Workers’ Union (2009); A Framework for modern employment, House of Commons; Gig Economy, House of Lords; Gig Economy, Congressional Research Service; Rasier Operations BV v. E TU Inc. (2024); Freelance Platform Work in the Russian Federation, ILO; PRS.

In some countries, courts have assessed the status of gig workers by closely examining the specific facts of each case and the actual functioning of the business.  Some examples of other jurisdictions defining gig work include:

UK:  The UK Supreme Court ruled that Uber drivers should be classified as workers and not self-employed contractors, citing the tight control which Uber exerts over its service.12  In contrast, due to their unlimited right of substitution, individuals working with Deliveroo were not recognized as workers.[18]  The right of substitution is a key factor in evaluating employment status which provides for any person to delegate their work to a substitute.[19]

California, US:  In 2020, California introduced legislation establishing the ABC test to assess whether a worker is an independent contractor. [20]^,[21]  Under this law, all individuals providing labour for compensation are presumed to be employees unless the hiring entity can demonstrate that: (i) the worker operates independently of the company’s control, (ii) the task performed falls outside the entity’s usual business, and (iii) the worker is engaged in an independent business of the same nature.20

European Union:  In December 2023, the European Union countries agreed on a Bill to regulate gig work.  The Bill presumes an employer-employee relationship between a worker and a platform company, if the conditions of direction and control by the employer are met.  The burden of proving that the contractual relationship in question is not an employment relationship is on the employer.[22]^,[23] 

Australia:  Australia categorises workers as employees and independent contractors.  While gig workers were initially classified as independent contractors, recent High Court rulings have raised concerns over potential misclassification.  It emphasized that the terms of the contract will be the primary basis for determining a worker’s classification.[24]

The draft Bill provides for a welfare fund fee to be paid by aggregators and platforms.  This will go into the Welfare Fund.  This fund will also receive contributions from the workers, and the government.  The question is who should cover the cost of funding social security for gig and platform workers. 

In other countries, social security is financed through different models including contributions by the state, the employer, and employees (see Table 2).  In India, under the Employees’ Provident Fund, both the employer and the employee contribute a certain percentage of the salary, whereas the Indira Gandhi National Old Age Pension Scheme is fully funded by the government.^[25]  Some countries have come up with social security benefits for gig workers, since they are not classified as employees and traditional social security models may not apply to them.[26] 

Table 2:  International Comparison of financing models in relation to social security

Country	Funding of social security	Benefits for gig/platform workers	Funding of gig workers benefits
India	Contributions by employers, employees, and the government25,[27]	Should get social security benefits like maternity benefits, accident insurance, old age protections; benefit schemes to be notified by government3	Contributions by gig workers, aggregators and the government
United Kingdom	National insurance contributions by employers, employees, and tax revenue[28]	Benefits based on employment status, self-employed workers can get some benefits like maternity benefits, state pension	Self-employed gig workers pay certain types of national insurance contributions
USA	Contributions by employers, employees and self-employed, interest income from Social Security trust fund investments[29]	Social security (includes old age and disability insurance) and Medicare (hospital insurance) for self employed	Contributions by self-employed under Self-Employment Contributions Act
Australia	Public funds for welfare of persons unable to support themselves due to age, unemployment; mandatory contribution by employer, employee for superannuation	Entitled to superannuation if worker meets definition of employee under the Superannuation Law	The platform will be required to make superannuation payments if worker meets the required definition.
Singapore	Contributions by employers and employees, state contributes in some cases (like low wage workers)	Work injury compensation, Central Provident Fund contributions	Contributions by platforms and workers to the Central Provident Fund

Sources: Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (India); Code on Social Security, 2020 (India); Social security rights in the UK, European Commission, 2011; Employment Status, Research Briefing, House of Commons Library, 2024; Social Security: The Trust Funds, Library of Congress, 2024 (USA); Self-employment tax (Social Security and Medicare taxes), USA; Australia's social security system, Senate Standing Committee on Community Affairs, Parliament of Australia, 2024; Conditions and pay information for gig workers, Government of Victoria (Australia); Social Insurance Code (2010:110), Sweden, 2010; Thematic Report on Financing Social Protection: Sweden, European Commission, 2019; Platform Workers Act, 2024 (Singapore); Central Provident Fund Act, 1953 (Singapore); PRS.

Under the draft Bill, a welfare fund fee will be collected from aggregators and platforms.  It will be between one to two percent of the payout of the gig worker in each transaction.  Failure to pay this fee will attract an interest on the amount due.  It will also be punishable with imprisonment for up to a year, or a fine up to two lakh rupees, or both.

The draft Bill suggests that the state government will notify social security schemes for Gig and Platform workers.  However, it does not specify various welfare entitlements available for gig workers, and factors on which social security payouts will depend.  The Code on Social Security, 2020 offers provisions for gig and platform workers to receive benefits like maternity leave, sickness and disability support, and old age protection.[30]  

According to the draft Bill, if the aggregator/primary employer fails to pay the welfare fund fee, they must pay an additional interest amount.  Failure to pay the welfare fund fee by the shall be punishable with imprisonment for up to one year, or a fine of up to two lakh rupees, or both.  The question is whether such failure should be treated as a criminal offence, or as a civil one.

In various other laws, similar lapses are penalised with civil penalties.  Several states have created Labour Welfare Funds, which are statutory funds managed by the state government for the benefit of workers.[31]  These are funded by contributions from employees and employers.  Under these Labour Welfare Fund Acts, if an employer fails to pay the required contributions, they are liable to pay an additional interest amount.31  Under the Income Tax Act, 1961, failure to deduct tax at source would result in a penalty equal to the tax amount which such person failed to deduct or pay.[32]  According to the Union Ministry of Finance, criminalising minor non-compliances increases burden on businesses.[33]  Parliament also passed the Jan Vishwas (Amendment of Provisions) Act, 2023, to decriminalise certain offences across 42 Acts to promote ease of doing business. 

The table below provides a comparison of the draft Telangana Bill with similar Bills in other states. 

Table 3: State wise comparison of gig workers laws

Feature	Telangana (draft Bill)	Karnataka (draft Bill)	Jharkhand (draft Bill)	Rajasthan (Act)
Definition of Gig Worker	Work arrangement falling outside the traditional employer-employee relationship.	Work through online platform, with pay determined by terms and conditions.	Work falls outside the traditional employer-employee relationship, obtained through an online platform, contractual, piece-rate.	Same as Jharkhand.
Definition of Platform Worker	Persons obtaining work through an online platform.	Has not distinguished between a gig worker and platform worker.	Same as Karnataka.	Same as Karnataka.
Rights of a Gig Worker	Registration, social security schemes, and grievance redressal mechanism.	Registration, social security schemes, and grievance redressal mechanism.	Same as Karnataka.	Registration, social security schemes, grievance redressal mechanism, participation in board discussions.
Registration of gig workers	Self-registration as prescribed. Aggregators to provide database of workers registered with them within 60 days from commencement of the Act.	Workers must be registered by aggregators within 60 days from commencement of the Act.	Same as Karnataka.	Same as Karnataka.
Registration of aggregators	Aggregators must register with the board within 45 days from the commencement of the Act.	Aggregators must register with the board within 60 days from commencement of the Act.	Same as Karnataka.	Same as Karnataka.
Transparency in Algorithm	Aggregators must inform the platform and gig workers about the procedure to seek information on the automated monitoring and decision making system that affects their work.	Aggregators must inform workers about: (i) rating systems, (ii) worker classification, (iii) use of personal data, and algorithms affecting work conditions.	Same as Karnataka.	No provision for transparency in automated monitoring and decision-making systems.
Termination of Work	Reason for termination must be given in writing, with a seven-day prior notice.	Reasons must be included in the contract, and a 14-day prior notice.	Same as Karnataka.	No provision for termination of work.
Grievance Redressal	Grievances can be filed via a portal or through an officer.  Order within 30 days.	Grievances can be filed via a portal or an officer.  Appeals within 90 days.	Same as Karnataka.	Same as Karnataka.
Welfare Fee	Between one to two per cent of the individual payout to the gig and platform worker, paid by the aggregator quarterly.	Based on worker pay per transaction or aggregator turnover, paid quarterly.	Percentage of transaction value, as specified by state government.	Same as Jharkhand.
Sources of Fund	Welfare fund fee, contributions by platform and gig workers, grants-in-aid from the centre and state government, CSR fund, grants, gifts, or donations.	Welfare fee, contributions by platform-based gig workers, grants-in-aid from both Central and State Government, grants, bequests or transfers.	Same as Karnataka.	Welfare fee, grants-in-aid from State Government, any other sources.
Usage of fund	Not specified	Prescribed by the state government	Prescribed by the state government	Prescribed by the state government

Sources: The Draft Telangana Gig and Platform Workers (Registration, Social Security, and Welfare) Bill, 2025; The Draft Karnataka Platform Based Gig Workers (Social Security and Welfare) Bill, 2024; The Draft Jharkhand Platform based Gig Workers (Registration and Welfare) Bill, 2024; Rajasthan Platform Based Gig Workers (Registration and Welfare) Act, 2023; PRS.