A Promising Start, But More Needed: Telangana’s Gig Worker Draft Bill

[Shubhranshu and Vashmath are students at NALSAR University of Law.]

On 15 April 2025, the Telangana government unveiled the draft Telangana Gig and Platform Workers (Registration, Social Security and Welfare) Bill 2025 (Bill) which, while awaiting its formal introduction in the State Assembly, has already received stakeholder feedback. With an estimated 4 lakhs gig workers in Telangana engaged in food and grocery delivery, ride-sharing, logistics and e-marketplace services, the state is joining Rajasthan and Karnataka in seeking to extend basic protections to this fast-growing workforce.

Gig workers have become indispensable to on-demand urban services but fall outside traditional employer–employee frameworks and lack labour-law protections. Although the Central Code on Social Security 2020, recognizes gig workers, it has not yet come into force. Meanwhile, platforms such as Flipkart, Amazon, Uber, Ola and Zomato classify their workers as independent contractors or partners, avoiding obligations for healthcare, provident funds, paid leave and formal hiring-and-firing procedures. This model grants platforms flexibility in rapidly changing market conditions but leaves workers without social security or recourse against arbitrary actions by aggregators. Even workers in the broader unorganized sector currently receive social-security benefits under the Unorganized Workers’ Social Security Act 2008 (to be repealed, once the code comes in force), a safety net from which gig workers are excluded. The Bill by linking the flexibility of gig work with the safeguards of traditional employment, it seeks to bring tens of thousands of vulnerable workers under a formal protection umbrella.

Empowering the Gig Workforce: The Bill's Main Strengths

The Bill introduces critical protections to address systemic vulnerabilities faced by gig workers. It provides social security benefits, health and safety, disclosure of algorithmic systems, and accessible grievance mechanisms, fundamental protections that are absent in the current informal employment setting. By including both “gig” and “platform” workers explicitly, the Bill broadens its protective scope, unlike relatively narrower framework in state like Karnataka, ensuring greater inclusivity.  A future oriented provision is the inclusion of “any other goods and service platform” to the list in Schedule I of the Bill. This open-ended phrase future-proofs the law, by taking in account the emerging platforms that may diverge from the traditional/conventional gig business models. Such flexibility acknowledges the dynamic and changing nature of the gig economy and helps ensure the law stays relevant as new gig business model emerge in future.

Furthermore, the Bill tackles algorithmic opacity, a persistent complaint of gig workers mainly due to cases like arbitrary deactivations, which has been reported by the Telangana Gig and Platform Workers Union. For example, one driver who had a high rating faced abrupt account deactivation without explanation, emphasizing the need for transparency here. By requiring platforms to reveal automated decision-making procedure in simple and understandable language, the Bill empowers workers to challenge such unfair practices. Another strength lies in institutionalizing accountability. Aggregators with over 100 workers must establish internal dispute resolution committee (IDRC) to resolve grievances within 30 days, this is a significant shift from reliance on ineffective AI chatbots. Human oversight will hopefully make grievance redressal fair, timely and accessible.

Summing up, these measures mark a big leap towards regulating gig work, blending platform’s flexibility with essential safeguards.

Scope for Improvement 

Though this Bill is progressive in its intent, it leaves some critical gaps that could undermine its effectiveness. A glaring omission is the absence of a formal right to refuse work, leaving workers vulnerable to abrupt termination for refusing to perform work even in emergency situations. For instance, a worker was fired for rejecting five delivery requests while sick, emphasizing the need for explicit protections against such arbitrary actions. Introducing a limited “right to reasonable refusal” akin to Jharkhand draft bill (Clause 16d) and Karnataka’s law (Section 12(4)) would protect workers’ health and overall well-being. Closely tied to this refusal rights is the Bill’s silence on providing an exhaustive ground for termination, here borrowing Karnataka’s approach (Section 15(1)) to specify and mention a list of exhaustive grounds for suspension in the contract itself would reassure workers they cannot be deactivated on undisclosed grounds. While sometimes an immediate dismissal may be justified, particularly in cases of foreseen physical or mental harm to customer, hasty action based on unverified or malicious complaints can be detrimental to worker’s interest. To prevent such happenings, the Bill should allow only an interim suspension pending a fair, due-process enquiry mirroring Section 536LH of Australia’s Fair Work Act 2009 (particularly Clause 4A read with Clauses 3A and 4D(i)), which permits up to a 7-day deactivation period to protect user health and safety while an investigation is carried out by the platform. Final suspension should follow only after a human-led investigation in line with natural justice principles. With human monitoring and supervision over all terminations (except the interim ones, in case of emergency) would leave no scope for unfair terminations by the algorithm. Having such a provision would directly address one of the main plights of worker that is being algorithmically deactivated without human intervention. This human oversight is especially crucial given the reports from the Telangana Gig and Platform Workers’ Union that at least 25 drivers are deactivated by the algorithm each week. Furthermore, these amendments would bring the Bill into harmony with Article 22 of the EU General Data Protection Regulation, which prohibits decisions based solely on automated processing including profiling that carry legal or practical consequences for individuals.

The Bill’s safety provisions, though a step forward, falls short of addressing hazards/risks which are unique to gig work. Its language echoes the generic standard of the Occupational Safety, Health and Working Conditions Code 2020, without putting into gig-specific hazards. While Section 15 requires aggregators to ensure “reasonably practicable” working conditions, it overlooks risks like road accidents caused by unrealistic delivery timelines, such as Zepto’s 10-minute model, which pressures workers to ride at unsafe speed. Additionally, the Bill ignores fatigue-related dangers by not aligning with the Section 7(2)(d) of Motor Vehicles Act 1988’s guidelines which prescribes 12-hour driving cap and mandatory breaks. Introducing a provision allowing workers to reject a reasonable number of assignments without penalty or capping daily working hours would directly address road-accident and fatigue risks unique to delivery and ride-hailing services.

Representation on the proposed Welfare Board is a welcome step but needs democratic strengthening. The Bill empowers the State Government to appoint them, rather than allowing unions or workers themselves to elect representatives. This raises doubts about how well these people can actually back up gig workers' concerns. This top-down approach risks tokenism and disconnect between board decisions and ground-level concerns. Moreover, by setting the quorum at just one-third of the members, the Bill risks allowing meetings to go ahead even when important stakeholder groups are not properly represented. For example, in a discussion on operation of e-commerce aggregators, a quorum might be met without any e-commerce aggregators representatives present, meaning decisions could be taken without their input. Having an election mechanism perhaps through recognized gig-worker associations to choose worker representatives and clarifying quorum rules to ensure that each category (workers, aggregators and government nominees) must be present for valid decision-making, would strengthen the Board’s legitimacy and help ensure that policies and welfare schemes truly reflect workers’ priorities.

Section 8(b) of the draft Bill ties access to social-security schemes to a minimum number of transactions or gigs completed. On the face of it this may sound reasonable as it excludes those workers who occasionally take gig work from its purview as those may not require the same level of protection as others, who take gig work as full time. However, certain baseline safeguards such as road-accident insurance or emergency medical cover ought not depend on such threshold. A new rider is no less vulnerable to a traffic accident than a veteran who has completed hundreds of rides. At minimum, every registered gig worker should be covered by basic protections like road-accident insurance and emergency health cover from day one. Full access to the broader welfare fund can still rest on meeting the transaction benchmark, but these foundational safeguards ought not to wait.

On the question of welfare fund levy, although the welfare levy is meant to be paid by the platforms, nothing in the Bill stops them from quietly recovering that cost by cutting into workers’ pay. An explicit restriction on passing the levy onto gig workers would protect their take-home earnings from these hidden deductions.

The draft also leaves unclear whether female gig workers can seek recourse under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act 2013 (PoSH Act), despite recent Karnataka High Court ruling that cab drivers qualify as “employees” under PoSH Act. Although, in this particular case, the victim was a customer and thus the High Court asked the platform to treat its drivers as POSH Act-covered employee, there is an equally urgent need to acknowledge that female workers, particularly in ride-hailing or late-night delivery roles, remain exposed to the risk of sexual harassment. So, explicitly extending these protections to all gig and platform workers and integrating PoSH Act complaints into the IDRC process would close a vital gap and protect women in a sector prone to informal and isolated work environments.

The Bill’s penal provisions, which include imprisonment for failure to make welfare contributions or submit reports, are pretty harsh especially when other laws typically address similar lapses with civil penalties/fines. As per the Finance Ministry, criminalizing minor non-compliances increases burden on businesses,  especially for small or emerging platforms which do not have big legal teams, due to this, they may be discouraged from operating or expanding. Reflecting this broader shift, Parliament enacted the Jan Vishwas (Amendment of Provisions) Act 2023, which decriminalized certain offences across 42 statutes to promote ease of doing business. A more nuanced penalty structure having different punishments for those who purposefully break the rules, and those who just make honest mistakes would be a better way to go. It will maintain deterrence without punishing honest mistakes and would help the sector grow in a healthier way.

Way Ahead 

While the Bill is commendable in introducing several key protection measures, its ultimate success depends to a large extent on the Gig and Platform Workers Welfare Board and the nature of the welfare schemes it devises. At the same time, the draft still exhibits gaps and drawbacks, this analysis has sought to highlight those issues and propose solutions to strengthen its legal framework.

Looking further ahead, Telangana should consider a phased pathway to grant full-employee status to workers relying exclusively on gig work for livelihood. Drawing on California’s ABC test, the state could require platforms to demonstrate that a worker (a) exercises independent control over task execution, (b) performs work outside the platform’s core business and (c) operates an independent trade. Workers unable to satisfy these criteria would automatically qualify as employees, gaining access to comprehensive labour protections. Similarly, a 2023 EU bill,  places burden on the alleged employer to prove that the employed person is not actually an employee. This gradual approach would allow the sector to mature giving platforms and policymakers time to adapt while ultimately ensuring that full time gig workers receive comprehensive social security and statutory benefits.