THE KARNATAKA GOVERNMENT recently released a draft Bill on domestic work (‘Bill’) for public feedback and comments. Since Independence, several attempts, mostly through private members’ Bills, have been made to introduce a comprehensive central law to regulate domestic work. None, however, have materialized. In the absence of central legislation, several state governments stepped in to incrementally regulate the sector. States like Andhra Pradesh, Bihar, Karnataka, Kerala, Rajasthan, Jharkhand, and Odisha included domestic work under “scheduled employment” under the Minimum Wages Act, 1948, ensuring minimum wage protection.
Others, such as Kerala, Maharashtra, and Tamil Nadu, established welfare boards to provide social security benefits. If enacted, Karnataka will be the first state with a comprehensive legal and regulatory framework for domestic workers in India.
At first glance, the Karnataka government’s move to regulate a sector that has long operated outside the reach of labour laws is laudable. Yet, a closer reading of the draft reveals significant inconsistencies—particularly in its provisions on social security—which risk undermining the legislation’s effectiveness. For the Bill to achieve any meaningful success, it will require refinement before enactment.
For domestic workers, who are predominantly women, the absence of social security has been a longstanding concern. Underpaid and dependent almost entirely on the goodwill of employers during times of crisis, these workers lack institutional support in cases of illness, unemployment, or old age.
India’s two flagship contributory social security schemes—the Employees’ State Insurance (‘ESI’) Scheme and the Employees’ Provident Fund (‘EPF’) Scheme—do not cover domestic workers. Together, ESI and EPF address all nine branches of social security that the International Labour Organization (‘ILO’) identifies as essential for a decent standard of living. Yet, because these schemes require contributions from both employers and employees, and apply only to establishments hiring ten or more workers, large segments of informal workers, including domestic workers, remain excluded.
Where women workers have been included in ESI and EPF coverage, the outcomes have been transformative. In 2016, for instance, even rumours of proposed restrictions on withdrawals from provident fund accounts sparked large-scale protests by garment workers in Bengaluru, underscoring how deeply these protections matter. Studies have also documented significant uptake and reliance on ESI facilities among women garment workers in Karnataka.
Uncertainty regarding entitlements of domestic workers
Turning to the draft Bill, the scope of entitlements remains unclear. While it proposes extending ESI coverage to all domestic workers - which includes benefits such as sickness, disablement, and dependent benefits, unemployment allowances, and funeral expenses—it also introduces separate provisions for maternity and paternity benefits and funeral assistance, which already fall under the ESI framework.
This duplication creates uncertainty about whether domestic workers will, in practice, receive the full suite of ESI benefits. Further complicating matters, the Bill extends the Employee Compensation Act, 1923 (‘ECA’) to domestic workers, even though judicial precedent establishes that workers covered under ESI cannot simultaneously claim benefits under the ECA.
Additionally, ambitious welfare schemes demand a strong and sustainable financial foundation. However, the funding model envisioned in the Bill appears fundamentally unsound. The Bill proposes an employer contribution of “up to 5%” as a welfare fee. This framework raises two major concerns: first, it does not clarify the base on which this fee is to be calculated and second it allows the government to set any rate between 1 percent and 5 percent, even though a 5 percent contribution is itself grossly inadequate.
To illustrate this inadequacy, it helps to compare the proposed structure with social security contributions in the formal sector. Assuming that the welfare fee is to be levied on workers’ wages — the only logical base — the contrast becomes stark.
The employer contribution towards pension under EPF is 8.33 percent; in addition, 3.25 percent of employer contribution goes towards health cover under ESI. The total employer contribution towards both EPF and ESI for health care and pension thus adds to 11.58% of the formal worker’s wage.
Against this, the Karnataka Bill for domestic workers earmarks only 5 percent to cover all her social security benefits, including both health care and pension. The Bill seeks to offer comparable benefits under ESI and EPF for the domestic worker with only around 40 percent employer contribution towards these schemes as compared to the formal sector worker.
If we do the math, a domestic worker earning Rs.10000 per month from multiple employers can only hope to get a relatively limited health care cover under ESI as compared to the formal sector worker, and a pension of less than Rs.1000 per month at constant price and wage, after 35 years of service. Surely this is not adequate by any standards. There has to be an additional fiscal grant from the government each year to augment the social security fund for domestic workers if it has to be meaningful.
Finally, as a general principle, when the government proposes a new law that entails significant financial implications particularly one financed through a statutory fee such as the proposed 5 percent employer contribution, it must release a complementary financial document. This document should clearly project expected collections and detail how the resulting corpus would be allocated across the various welfare benefits promised in the legislation.
All in all, while the Bill represents a crucial step towards recognizing domestic work as real work deserving of protection, its success hinges on sound financial planning and legislative coherence. Without these, the Bill risks remaining an ambitious but ultimately a hollow gesture.