Federalism and the Gig Economy: Tech Aggregators Challenge Karnataka’s Gig Workers Welfare Act

Major platform aggregators, including Swiggy, Zomato, and Zepto, have approached the Karnataka High Court to challenge the constitutional validity of the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Act. The petitioners argue that the state-level legislation is repugnant to the Union Government's Code on Social Security, 2020. This legal battle highlights the growing friction between state-level welfare initiatives and central frameworks in regulating India's rapidly expanding gig economy. The core of the aggregators' argument rests on Article 254 of the Indian Constitution, which deals with inconsistency between laws made by Parliament and laws made by State Legislatures. Since "Welfare of labour including conditions of work" falls under the Concurrent List (Entry 24), both the Centre and States possess the power to legislate on it. However, the petitioners contend that the Centre's Code on Social Security, 2020, already establishes a comprehensive, uniform national framework for gig workers. They argue that the Karnataka Act creates an overlapping regulatory regime, imposing dual compliance burdens and double financial liabilities (such as welfare levies) on businesses, thereby impacting their right to carry on business under Article 19(1)(g).