Centre Mandates Wage Code Compliance in Contracts, Repeat Violators Risk Blacklisting

Central Government Mandates Wage Payment Timelines for Contractors

The Centre has issued a circular, effective May 8, requiring firms seeking central government contracts to ensure full compliance with the Code of Wages, 2019. The Department of Expenditure has made it mandatory for employers to adhere to the timelines provided under the Code for disbursing wages to workers.

Key Provisions of the Code

The central government published all the rules under the four labour codes on May 8 and May 9. The circular outlines specific payment timelines for workers, including:

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

The circular also emphasizes the importance of penalty provisions in every contract in case of non-compliance with the Code. Principal employers (ministries, departments, etc.) are mandated to ensure that sufficient funds are made available for timely payment to outsourced manpower before entering into such contracts.

Consequences of Non-Compliance

In cases where payment is delayed inordinately, the principal employer shall pay directly to the contract workers as per the terms and conditions, which shall be clearly included in the contract agreement. The circular notes that in such cases, action will be taken to blacklist the contractor by the ministry. For repeat offences, the contractor will be blacklisted from all the ministries and departments of the Government of India, in accordance with Rule 151 of the General Finance Rules, 2017, and the guidelines issued by the Department of Expenditure.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

Reforms Aim to Improve Worker Protections

These reforms aim to improve protections for workers, including Contract Workers, by ensuring stronger wage safeguards, expanded social security, and better working conditions under a transparent and streamlined compliance system.