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New Compliance Mandates
The government's revised instructions, effective alongside the four new Labour Codes from November 2025, place stringent obligations on central ministries, departments, autonomous bodies, and Central Public Sector Enterprises (CPSEs). Procurement-linked compliance measures now dictate that contractors must disburse wages via bank transfer or electronic modes exclusively. This shift aims to enhance transparency and security in wage disbursements.
Strict Payment Timelines and Penalties
The order, issued by the Department of Expenditure's Procurement Policy Division, outlines specific deadlines for wage payments. Daily wage earners must be paid before the end of their shift, weekly workers before their holiday, and fortnightly workers within two days of the fortnight's end. Monthly payments have a slightly longer window, due on the seventh day of the following month. If contractors fail to meet these deadlines, government bodies will pay workers directly and then move to blacklist the contractor. Repeat offenders risk a nationwide ban from all government contracts.
Principal Employer Accountability
Principal employers are now explicitly responsible for ensuring contractors pay wages on time, as per the Occupational Safety, Health and Working Conditions (OSH&WC) Code, 2020. This requires clear contract terms and ensuring funds are available for outsourced staff. Drawing and Disbursing Officers (DDOs) will verify contractor compliance monthly, providing oversight to prevent wage delays and labour disputes.
Addressing Labour Unrest
These updated directives arrive as labour unrest has increased in various industrial areas. By standardizing payment processes and enforcing penalties, the government aims to improve working conditions for contract employees and reduce industrial disputes. The final rules for implementing the Labour Codes were also announced on Friday, marking a significant push to reform labour practices.