Centre Tightens Labour Rules; Delayed Wages Could Cost Contractors Blacklisting

The Central Government of India has issued new directions to make sure timely payment of wages to contractual workers employed in central ministries, departments, autonomous bodies and Central Public Sector Enterprises (CPSEs). These instructions have been issued considering the four new Labour Codes, effective from November 2025. Rules under these labour codes were released on Friday.

The government has also taken strict action against the contractors who failed to pay the workers’ salaries promptly. The Procurement Policy Division of the Department of Expenditure, Ministry of Finance, had issued an order on May 08, 2026, directing all central ministries, departments, statutory and autonomous bodies and CPSEs to make sure timely release of wages by the contractors.

Workers must be paid their wages as per the type of work arrangement: Daily wage workers must be paid by the end of the shift, weekly workers before the weekly holiday, fortnightly workers within two days after the fortnight ends, and monthly workers within seven days of the next month. All payments must be made using bank transfer or other electronic methods.

If in case, payment of wages is not made as per the aforementioned time limits and is delayed for a longer time, the principal employer, including ministries and departments, will be responsible for making direct payment of wages to the contract workers as per the conditions mentioned in the contract agreement and later recover the same amount from the concerned contractor. If such a situation arises, the contractor can even be blacklisted by thelabour ministry. Repetition of non-compliance in the future can even lead to blacklisting from all the ministries and government departments.

These new directions also require contracts and tender documents to include penalty clauses for delayed wage payments. Drawing and Disbursing Officers (DDOs) will every month keep a check on contractors to see whether they are complying with the rules. Contractors must also electronically inform the employer about payments made to workers. The move comes at a time when labour unrest has been reported in several industrial areas, highlighting the need for better protection of contract workers.