Punjab Vidhan Sabha passes bill to transition outsourced workers to direct contracts

Punjab’s Vidhan Sabha on Monday passed a bill to move thousands of eligible outsourced workers in government departments and public sector organisations to direct contractual employment with the state government.Finance Minister Harpal Singh Cheema introduced and steered the Punjab State Outsourced Personnel (Transition to Contractual Engagement) Bill, 2026, through the House on Monday.

The legislation is aimed at addressing concerns over irregular wages, arbitrary deductions and job insecurity faced by outsourced workers, particularly those in Group C and Group D roles.

The first phase is expected to cover around 26,000 to 28,000 workers. Instead of working through private manpower agencies, eligible employees will be engaged directly by the Punjab government on annual contracts.

Cheema said the move would remove middlemen and make the system more transparent while ensuring continuity of essential public services.

“This will ensure transparency, uninterrupted public service delivery and dignity of labour,” he said.

Under the bill, full-time, non-seasonal workers providing essential services must generally have completed at least five years of continuous service to qualify.

The requirement has been reduced to three years for workers in high-risk areas such as high-voltage power complaint handling, sanitation and sewer maintenance, and firefighting.

The government will verify eligibility through attendance records, including digital and biometric systems, bank statements showing regular salary payments and police clearances.

Departmental committees will examine applications, while appellate bodies will be established to deal with disputes and appeals.

The legislation also provides safeguards on pay. Workers moving to direct contracts cannot receive less than their previous net take-home salary or the minimum wage prescribed under the Code on Wages, 2019.The government will also take responsibility for statutory benefits, including provident fund, Employees’ State Insurance and gratuity. Eligible workers will also receive leave benefits, including maternity and casual leave.

The new law repeals the Punjab Adhoc, Contractual, Daily Wage, Temporary, Work Charged and Outsourced Employees’ Welfare Act, 2016, from the date of its enactment.

A State Empowered Committee headed by the Chief Secretary will oversee implementation, review the process annually and deal with specialised cadre-level appeals.

Cheema described the legislation as a major step towards improving working conditions for employees who provide essential services across Punjab.

The government will now notify a uniform cut-off date and establish the committees required to implement the transition across departments and public sector bodies.

In addition to it, the Punjab Legislative Assembly on Monday also passed the Punjab Goods and Services Tax (PGST) Amendment Bill, 2026, in a move aimed at making compliance easier and creating a more business-friendly environment in the state.