The Telangana Cabinet has approved the draft of the “Platform-Based Gig Workers (Registration, Social Security and Welfare) Act, 2025”, a landmark legislative effort to extend social security and legal recognition to the state’s estimated three lakh gig and platform workers. This pioneering state-level law aims to move beyond the traditional employer-employee dichotomy, creating a structured, accountable, and transparent framework for the rapidly expanding gig economy.
Telangana Gig Workers Act 2025: Explore the groundbreaking Telangana Platform-Based Gig Workers (Registration, Social Security and Welfare) Act, 2025. Learn about mandatory worker registration, the welfare fund contribution (1-2% of payout by aggregators), algorithmic transparency mandates, and the establishment of a dedicated Social Security and Welfare Board. Understand how this law provides a legal identity, social security benefits, and a robust grievance redressal system for gig workers in Telangana, setting a national benchmark for gig economy governance.
Key Pillars of the New Legislation
The draft Act is comprehensive, focusing on three core areas: Registration, Welfare, and Transparency.
Registration and Legal Identity
The first critical step is to provide legal identity to gig and platform workers, who are currently excluded from traditional labour laws.
- Unique ID: All registered gig and platform workers will receive a Unique ID, making them eligible for state-specific welfare schemes and protections.
- Mandatory Registration: Both workers (through self-registration) and Aggregators/Platforms are mandated to register with the state. Platforms must submit their existing worker database within 60 days of the Act’s commencement.
- Definition: The law specifically defines a “Gig Worker” (outside traditional employment, paid per output) and a “Platform Worker” (accessing work through a digital platform), broadening the scope of protection.
Social Security and Welfare Fund
To fund the welfare measures, the Act establishes a dedicated financial and administrative mechanism.
- Welfare Fund: A Social Security and Welfare Fund will be created to provide various benefits like health coverage, accidental death relief, and marriage assistance.
- Aggregator Contribution: The fund will be primarily financed by a Welfare Fund Fee levied on aggregators/platforms, ranging from 1% to 2% of the payout made to the worker in each transaction.
- Funding Sources: The fund will also receive contributions from state government grants, Corporate Social Responsibility (CSR) allocations, and individual donations.
- Welfare Board: A 20-member multi-stakeholder Gig and Platform Workers Welfare Board, chaired by the Labour Minister, will be constituted to oversee the registration, fund collection, scheme implementation, and data monitoring.
Algorithmic Transparency and Dispute Resolution
A core challenge in the gig economy is the opacity of platform algorithms that determine work allocation, incentives, and worker ratings. The new law directly addresses this.
- Algorithmic Transparency: Platforms are required to clearly communicate how their automated monitoring and decision-making systems (algorithms) affect job assignments, incentives, and worker ratings. This ensures workers understand the basis of their earnings and performance assessment.
- Fair Working Conditions: Workers are guaranteed the right to access welfare schemes and work in safe conditions, with provisions to ensure they receive at least the minimum wage.
- Termination Safeguards: The Act mandates a seven-day notice period for termination, except in cases of immediate misconduct, providing a layer of job security. A 14-day notice is required for any contractual changes.
- Grievance Redressal: A multi-layered mechanism is established, including a government-appointed Grievance Redressal Officer, internal dispute resolution committees for platforms with over 100 workers, and an Appellate Authority at the Deputy Commissioner level.
- Penalties for Non-Compliance: Aggregators failing to pay the welfare fee face significant fines, starting at ₹50,000 for a first offense and escalating for subsequent violations. A Digital Welfare Fee Verification System (WFFVS) will be set up for technology-driven tracking of contributions.
Frequently Asked Questions (FAQ)
What is the Telangana Gig Workers Act, 2025?
It is a pioneering state law approved by the Telangana Cabinet to regulate the gig economy and provide social security, welfare, and legal recognition to gig and platform workers in the state.
Who is covered under this Act?
The Act covers all gig workers (those outside traditional employment, paid per output) and platform workers (those sourcing work through digital platforms) registered with the Welfare Board, including those in ride-sharing, food/grocery delivery, and logistics.
How is the Gig Workers Welfare Fund financed?
The fund is financed primarily by a Welfare Fund Fee of 1% to 2% of the transaction payout, which is contributed by the aggregators/platforms. It is also supported by government grants, CSR contributions, and donations.
What happens if an aggregator does not comply with the Act?
Aggregators are subject to significant penalties and fines for non-compliance, particularly for failing to remit the Welfare Fund Fee. The penalties increase substantially for repeat offenses.
