Punjab Assembly passes bill to bring thousands of outsourced workers under direct Govt contracts
Babushahi Bureau
Chandigarh, August 10, 2026: The Punjab Vidhan Sabha on Monday passed the Punjab State Outsourced Personnel (Transition to Contractual Engagement) Bill, 2026, paving the way for thousands of outsourced workers in Group-C and Group-D categories to transition from third-party agencies to direct contractual engagement with the state government.
The legislation, steered by Finance Minister Harpal Singh Cheema, aims to provide greater job security, wage protection and statutory benefits to eligible outsourced personnel working across government departments and public sector entities.
According to the government, around 26,000 to 28,000 workers are expected to benefit in the first phase of implementation.
Under the new law, eligible workers will be engaged directly by the Punjab Government on a year-to-year contractual basis, eliminating third-party contractors for Group-C and Group-D personnel covered by the legislation.
Five-Year Service Requirement
The Bill sets five years of continuous service as the general eligibility criterion. However, recognising the higher risks faced by certain frontline workers, the qualifying period has been reduced to three years for personnel involved in high-voltage power complaint redressal, sanitation and sewer maintenance, and firefighting operations.
The transition process will involve verification of service records, attendance through digital or biometric systems, bank statements showing regular salary payments and police clearance.
Departmental cadre eligibility committees, office-level screening committees and appellate authorities will be established to scrutinise applications and resolve disputes within prescribed timelines.
Take-Home Pay Protected
The legislation provides that the remuneration of workers after transition cannot be lower than their previous net take-home pay under the outsourcing arrangement. Their wages will also have to comply with the minimum wage requirements under the Code on Wages, 2019.
The government will assume responsibility for statutory benefits, including Provident Fund (PF), Employees’ State Insurance (ESI), gratuity and eligible leave benefits, including maternity and casual leave.
Finance Minister Harpal Singh Cheema said the legislation was aimed at ending the vulnerabilities created by dependence on manpower supply agencies.
“By cutting out intermediary agencies and establishing a direct relationship between the government and workers, the state ensures greater transparency, uninterrupted public service delivery and dignity of labour,” Cheema said.
New Oversight Mechanism
A State Empowered Committee headed by the Chief Secretary will oversee implementation, conduct annual reviews and deal with specialised cadre-level appeals.
The Bill also repeals the Punjab Adhoc, Contractual, Daily Wage, Temporary, Work Charged and Outsourced Employees’ Welfare Act, 2016, from the date of its enactment.
Cheema described the legislation as a major step towards protecting the interests of workers who provide essential services across Punjab.
“With direct contracts, statutory benefits, digital accountability and fair wages, we are building a stronger and more resilient public administration,” he said.
Following the passage of the Bill, the state government will proceed with fixing a uniform cut-off date and establishing the committees required to implement the transition across departments and public sector entities.