Employment LawRights, Risks and Regulation: Telangana’s Approach to Gig and Platform Workers Welfare

INTRODUCTION

In the era of innovation and digitalization, the notion of the gig & platform economy has seen a big boon and it is primarily due to the reason that, in the contemporary period, everyone is using digital platforms across the country that aid in connecting people for on-demand services. Gig workers are those type of workers who operates outside the scope and limitations of the traditional employer-employee relationship which has persisted in the country since ages.

Presently, millions of people across the country are affianced specifically in the gig and platform economy. It is a type of economy which differs from traditional employer-employee relationships, as it is based on freelancing or task-oriented work. As per the data and statistics of NITI Aayog, around 77 lakh workers were part of the gig economy in the year 2020-21, and it is expected to reach more than 2 crores towards the dawn of this decade. The government of India, in order to address the needs and necessities of gig workers, introduced the Code on Social Security of 2020, which formally provides recognition to them as a distinct category. Apart from this, the government also facilitated the registration of gig workers on the e-Shram portal and further extended several welfare schemes to the gig and platform workers, in the country.

Moving forward, at the state level, various initiatives were taken by the governments of different states to draft and enact a legislative framework governing gig workers. In the year 2023, Rajasthan became the first state to enact a regulatory framework for gig workers, namely, the Rajasthan Platform-Based Gig Workers (Registration and Welfare) Act 2023. Subsequently, after this, several other states like Karnataka and Jharkhand also put forth draft legislation for registration, protection as well as welfare of gig workers. Moreover, recently, in April 2025, Telangana also joined the list of those states, as it has also released a draft bill for protecting the rights of gig workers and facilitating other benefits to them.

THE DRAFT BILL

On 14^th April 2025, the government of Telangana introduced a bill namely the Telangana Gig and Platform Workers (Registration, Social Security and Welfare) Act, 2025, as the number of gig workers in the state is continuously increasing with the increase in digitalization. The primary aim and objective behind the introduction of this bill is to facilitate the registration process for gig workers along with providing social security and other welfare measures to them. In addition to this, the bill also aimed to safeguard and protect various rights of gig as well as platform workers in the state of Telangana.

OVERVIEW AND KEY FEATURES OF THE DRAFT BILL

1. Welfare Board

The proposed draft bill provides for the formation and establishment of a welfare board. It says that the board will be constituted by the state government for the welfare of gig and platform workers. Apart from this, the functions of the board include the facilitation of registration for both gig workers as well as aggregators, monitoring and examining the collection of funds, overseeing the implementation of social security measures and providing assistance to gig workers in obtaining benefits. The board will be headed by Minister of Labour as the chairperson.

 2. Social Security and Welfare Fund

The draft bill also includes the establishment of social security and welfare fund. This fund will be primarily for gig and platform workers, and it will be financed through different means and sources like grants from central and state government, welfare fund fees which are to be paid by aggregators and platforms, and other contributions by workers towards particular schemes. In addition to this, the government will also set up a verification system to track the payment which will be further monitored by the welfare board.

 3. Rights of Gig and Platform Workers

Moving forward, the draft bill also provides for a set of rights for both the gig as well as platform workers. The workers have the right to register with the state regardless of the duration of their work. Additionally, they also have the right to access a grievance redressal mechanism and social security schemes. These social security schemes will provide various different kinds of benefits, aid, and assistance to gig and platform workers in the digital period.

4. Duties of Aggregators

The bill further put forth the responsibilities of aggregators. This includes setting up a designated Point of Contact to handle worker inquiries on their platform and submitting worker data on the Board quarterly.

5. Grievance Redressal Mechanism

Towards the end, the draft bill also consists of a grievance redressal mechanism to address the dispute in between the workers and aggregators. The government will appoint a Grievance Redressal Officer to initially hear the complaint, and further, an appellate authority will also be appointed to appeal against the order of the Grievance Redressal Officer, within the stipulated time period as mentioned within the draft bill. Lastly, the draft bill also provides for a penalty of Rs. 1,00,000 and/or imprisonment for up to 1 year period on failure to pay the fund fee by the aggregator/primary employer. Moreover, if they fail to submit any documents required under the bill, they will be punished with a fine of up to Rs 50,000.

IMPORTANCE OF THE DRAFT BILL IN THE DIGITAL ERA

The Telangana draft bill holds significant importance in the current digital age due to the following reasons:

1. It provides formal recognition to gig and platform workers, helping them come under the purview of the law and access structured protections.
2. The bill ensures inclusion of gig workers in social security frameworks traditionally reserved for formal sector employees.
3. Introduction of grievance redressal mechanisms gives workers a platform to report exploitation or concerns.
4. Regular data submission by platforms will enhance transparency and enable data-driven interventions by the government.
5. The draft bill affirms the rights of gig workers to access state services, legal protections, and participate in shaping their work conditions.
6. It creates institutional mechanisms to oversee the evolving dynamics of the platform economy, supporting long-term digital governance.
7. The draft bill serves as a model for other Indian states, enabling harmonized approaches to gig worker welfare across the country.

CHALLENGES

1. While the draft bill mandates a tripartite contribution model, it does not clarify which stakeholder bears the largest share of responsibility, potentially leading to implementation hurdles.
2. The draft bill lacks clarity on the nature, extent, and eligibility criteria for welfare entitlements to be provided to gig workers.
3. The draft bill mandates quarterly submission of worker data without detailing safeguards to ensure data protection and privacy.
4. Smaller aggregators may find it difficult to comply with the draft bill’s obligations, such as fund contributions and data reporting, without technical or financial support.
5. Establishing a robust verification and payment monitoring system may prove difficult, especially in ensuring consistent aggregator compliance.
6. The proposed welfare board does not explicitly mention representation from gig workers unions or collectives, which could weaken participatory governance.

WAY FORWARD

To ensure the effective implementation and long-term success of the Telangana Gig and Platform Workers Act, 2025, the following steps are recommended:

1. Include a detailed list of social security benefits such as health insurance, accident coverage, maternity benefits, and pension schemes, along with eligibility criteria and timelines.
2. Establish robust data protection mechanisms aligned with national data protection laws to safeguard worker information submitted by aggregators.
3. Offer transitional support, particularly to smaller platforms, to help them comply with new regulatory and financial obligations without business disruption.
4. Set up regular feedback loops, grievance audits, and third-party assessments to track implementation efficacy and make iterative improvements.
5. Train government officials, platform HR teams, and welfare board members on the nuances of gig employment to ensure effective and sensitive enforcement.
6. Mandate the inclusion of elected representatives or unions of gig and platform workers on the welfare board to make governance participatory and inclusive.

AMLEGALS REMARKS

The formation and introduction of the draft bill on the Telangana Gig and Platform Workers Act, 2025 is one of the major steps taken to provide security and welfare to gig and platform workers in the digital age. It marks a pivotal step toward acknowledging and addressing the socio-economic challenges faced by gig and platform workers. This act will not only provide social security but also ensure that they should benefit from different welfare schemes.

However, the proposed social security funding model in the draft bill envisions contributions from three key stakeholders i.e., the government, gig and platform workers themselves, and the platforms or aggregators. However, this raises an important question regarding which party should shoulder the primary responsibility for financing these benefits.

Additionally, the draft bill lacks clarity on the specific welfare entitlements that gig and platform workers would receive, as well as the criteria or factors that would be used to determine the extent and nature of these welfare payouts.

In conclusion, the draft bill is a welcome initiative that could catalyze a national framework for gig worker welfare, but will require careful implementation and iterative refinement to achieve its full potential.

– Team AMLEGALS assisted by Mr. Aditya Raj Pandey (Intern)

For any further queries or feedback, feel free to reach out to mridusha.guha@amlegals.com or laksha.bhavnani@amlegals.com