Government strengthens protections for outsourced and contractual workers across Central institutions
The Centre has moved to significantly strengthen protections for outsourced and contractual workers engaged across Central Ministries, Departments, autonomous bodies and Central Public Sector Enterprises through a new set of procurement-linked compliance measures for the labour codes.
The Ministry of Labour and Employment said the reforms aim to ensure timely payment of wages, mandatory remittance of social security contributions, greater accountability of contractors and principal employers, and stronger enforcement mechanisms against violations of labour laws.
By linking labour law compliance directly with eligibility for government contracts and bidding, the measures seek to curb delays in wage payments and defaults in statutory dues affecting contract workers. The new framework operationalises worker protections envisaged under the four Labour Codes while introducing stricter penalties, including debarment and blacklisting, for firms violating timely wage and social security contributions.
Under fresh instructions issued by the Procurement Policy Division of the Department of Expenditure on Friday, Ministries, Departments, Statutory, Autonomous Bodies and Central Public Sector Enterprises have been directed to strictly ensure that contractors disburse wages within prescribed timelines and the Drawing and Disbursing Officers (DDOs) verify compliance every month.
The instructions reiterate that under Section 55(3) of the Occupational Safety, Health and Working Conditions Code, 2020, the principal employer is responsible for ensuring that contractors pay wages on time. The directions also invoke Section 17(1) of the Code on Wages, 2019, which prescribes timelines for payment of wages.
Daily wages should be paid by the end of shift, Weekly wages before weekly holiday, Fortnightly wages within two days of end of fortnight and Monthly wages within seven days of the succeeding month. The Government has further directed that, Wage payments should be made only through bank transfer or electronic mode, Contractors must electronically inform principal employers after payment, Contracts must contain penalty clauses for delayed wage payments, Ministries must ensure adequate fund availability before awarding manpower contracts and Procuring entities using GeM or other platforms should block or earmark funds for outsourced manpower payments for the contract period or till the end of the financial year, whichever is earlier.
The instructions also mandate faster reimbursement cycles. Contractors are to submit bills by the 10th of every month after making wage payments, while DDOs have been directed to clear such bills by the 15th of the same month. The government has empowered principal employers to directly pay contract workers in cases of inordinate delay by contractors, with provisions for blacklisting and wider debarment action in repeat cases.
Reviewed by SBR
on
May 10, 2026
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