Punjab Vidhan Sabha enacts bill steered by Finance Minister Harpal Singh Cheema to transition outsourced personnel into direct contractual engagement
Bill establishes a 5-year continuous service threshold, reduced to 3 years for high-risk categories like power complaint redressal, sanitation, and firefighting: Harpal Singh Cheema
Bill ensures net take-home pay is protected, full compliance with the Code on Wages, and mandatory provisioning of PF, ESI, gratuity, and leave entitlements: Harpal Singh Cheema
New law eliminates third-party contractors for Group-C and Group-D workers, ensuring a direct Govt-Employee relationship and absolute transparency: Harpal Singh Cheema
Chandigarh, 10th August, 2026
In a historic move toward administrative reform and employees welfare, Punjab Finance Minister Advocate Harpal Singh Cheema successfully introduced and steered the passage of THE PUNJAB STATE OUTSOURCED PERSONNEL (TRANSITION TO CONTRACTUAL ENGAGEMENT) BILL, 2026, in the Punjab Vidhan Sabha on Monday. The landmark legislation aims to provide a secure legal framework for thousands of eligible outsourced workers deployed across various government departments and public sector entities.
The newly enacted law addresses long-standing systemic vulnerabilities faced by thousands of outsourced personnel in Group-C and Group-D categories (including twenty-six thousand to twenty-eight thousand in the first phase).
Previously subjected to precarious working conditions, irregular wage disbursements, and arbitrary deductions by third-party contractors, these essential workers will now transition into direct contractual engagement with the Government of Punjab on a year-on-year basis.
Speaking on the floor of the House, Finance Minister Cheema emphasised that the state government is deeply committed to protecting individuals who render vital operational and technical services. He said, “Reliance on manpower supply agencies frequently exposed public utilities, healthcare continuity, and safety infrastructure to disruption risks caused by agency defaults. By cutting out intermediary agencies and establishing a direct master-servant relationship, the state ensures absolute transparency, uninterrupted public service delivery, and dignity of labor.”
The legislation outlines criteria for eligibility, ensuring that full-time, non-seasonal personnel engaged in essential public services are covered. To qualify, workers must have completed five years of continuous service. Recognising the extraordinary occupational hazards and risks faced by front-line workers in high-voltage power complaint redressal, sanitation and sewer maintenance, as well as firefighting operations, the qualifying threshold has been specially reduced to three years for these hazardous categories.
Transparency and accountability form the bedrock of the new enactment. The transition process mandates the verification of authentic attendance through digital and biometric systems, authenticated bank statements confirming regular monthly salary credits, and police clearances.
Administrative departments will establish dedicated departmental cadre eligibility committees, office-level screening committees, and appellate bodies to adjudicate applications efficiently and fairly within strict statutory timelines.
Crucially, the legislation safeguards employee compensation by stipulating that remuneration upon transition shall not be lower than the net take-home pay previously received under the outsourcing arrangement, nor can it fall below the minimum wage standards established under the Code on Wages, 2019. Furthermore, direct employers will assume full legal responsibility for statutory contributions, including Provident Fund, Employees’ State Insurance, and gratuity, alongside comprehensive leave entitlements such as maternity benefits and casual leave.
The enactment also repeals the older Punjab Adhoc, Contractual, Daily Wage, Temporary, Work Charged and Outsourced Employees’ Welfare Act of 2016 from its date of enactment. To oversee implementation, a State Empowered Committee headed by the Chief Secretary has been constituted to review operations annually and handle specialized cadre-level appeals.
“This visionary legislation marks the end of an era of exploitation for thousands of hardworking families, who keep Punjab running. By bringing our essential personnel onto direct contracts with guaranteed statutory benefits, digital accountability, and fair wages, we are building a stronger, more resilient public administration”, said Harpal Singh Cheema.
With the passage of the bill by the House, the Government of Punjab has initiated immediate steps to notify the uniform cut-off date and set up the requisite administrative committees, ensuring that the transition process is executed smoothly and expeditiously across all departments and public sector entities.
