IN LATE JULY, THE BIHAR LEGISLATIVE ASSEMBLY passed the Bihar Platform Based Gig Workers (Registration, Social Security and Welfare) Act, 2025 (‘Bihar Act’) with little fanfare. The Bihar government is now the third state in the country, after Rajasthan and Karnataka, to officially notify a separate law for platform-based gig workers.
Unlike its sister legislations, the Bihar Act has attracted little to no scrutiny. This is a costly oversight since even as the legislation goes further than other state laws in securing workers’ rights, troublingly it introduces provisions that risk undermining the realisation of those very rights.
Statutory recognition of workers’ welfare rights
Unlike the Karnataka and Rajasthan Act which stop short of guaranteeing any minimum welfare rights and instead leave the design of welfare schemes for the government to evolve through rules, the Bihar Act directly grants workers statutory entitlements to accident compensation and maternity benefits. While one may debate the adequacy of these entitlements, their very inclusion in the principal Act marks a powerful step forward in itself.
The experience of the platform-work laws of Karnataka and Rajasthan underline the importance of this approach. In Karnataka, although the legislation has been enacted, the draft rules released for consultation do not adequately spell out workers’ welfare entitlements. Rajasthan fares even worse. Its rules have not been notified at all even after two years of passage of the parent act, rendering the law effectively in cold storage. In both states, the absence of operational clarity around social security entitlements has left workers in limbo. Without clear statutory provisions on worker entitlements, there is also a very real risk that these platform work laws will meet the same fate as the Building and Other Construction Workers Act (‘BoCWA’), wherein, as documented by the Comptroller and Auditor General of India, the funds collected through a cess have been systematically underutilised. The insertion of immediate legally binding entitlement in the Bihar Act is therefore a welcome measure.
Moving beyond transparency: Regulating algorithmic management
For platform-based gig workers, nearly every aspect of their work, including task allocation, disciplinary action, earnings, and even termination, is dictated by computer-programmed systems, commonly referred to as algorithms. In such a context, ensuring fairness and decent working conditions is impossible without comprehensive regulation of these algorithmic decisions.
Among all the state legislations introduced so far, the Bihar Act goes the furthest in regulating algorithms. The Karnataka Act, for instance, merely grants workers the right to access information about how algorithms influence their conditions of work, including fares and earnings. But information alone is of limited value if the workers lack the ability to challenge these algorithmic decisions and secure meaningful remedies. The Bihar Act addresses this gap by granting workers not only the right to obtain information, but also the right to seek a review of algorithmic decisions that affect their livelihoods. It further requires platforms to establish grievance redress mechanisms, ensuring timely resolution with human oversight.
Other noteworthy features of the Bihar Act include an obligation on platforms or aggregators with more than 100 workers to provide designated rest-stops, extension of the right to seek redress under the Industrial Disputes Act, 1947 to platform workers, and introduction of robust protections for personal data.
Yet, alongside these progressive measures, the Bihar Act also contains problematic provisions that risk undercutting the rights it seeks to secure, unless addressed through amendment.
Inadequate structure for funding welfare
The first major concern is the weak framework for funding of welfare entitlements under the Bihar Act. At present, the government may levy only a “welfare fee” of one to two percent on workers’ payouts. According to Zomato Founder and CEO Deepinder Goyal, the average payout for delivery partners who logged in for at least 8 hours a day and 26 days a month is ₹28,000 per month. A one percent levy for such workers would generate only ₹280 per month per year, barely a fraction of the approximately ₹4200 contributed every month by an employer of a garment worker earning ₹28,000 per month through Employees’ State Insurance (‘ESI’) and Employees’ Provident Fund (‘EPF’).
The inadequacy of this rate of 1 percent is also evident from the fact that the amount generated at such rate is less than the average amount spent by the Employees’ State Insurance Corporate (‘ESIC’) only on medical and cash benefits on each insured person in 2023-2024, an approximate sum of ₹4250 according to the Annual Report of ESIC for 2023-24.
As a result, the Bihar Act’s proposed levy of one to two percent would be incapable of financing the welfare entitlements it promises to platform-based gig workers.
Restricting worker's right to freedom of association
A second and fatal flaw in the Bihar Act is its explicit bar on workers forming associations under the Act. The right to form associations or unions is a fundamental right under the Constitution of India, subject only to reasonable restrictions in the interests of sovereignty and integrity of India or public order.
It is difficult to argue that allowing gig and platform workers to unionize would endanger either. This provision is, therefore, unconstitutional. That said, workers still retain the right to unionize under the Trade Unions Act, 1926, a central law whose jurisdiction remains unaffected by the Bihar Act.
The Act compounds this error through its internal inconsistency. While barring associations in one section, it simultaneously empowers the government to "encourage and support workers' collectives and unions" in another. This contradiction suggests the restriction was inadvertent, but that does not make it any less problematic. India’s experience with labour protection shows that strong unions and collective representation are indispensable for enforcement of labour laws, and any restriction on freedom of association for platform-based gig workers will completely undermine the progressive features of the Bihar Act.