On 8 May 2026, the Ministry of Finance issued an Office Memorandum mandating strict compliance with timely payment of wages and salaries to all manpower engaged directly or through contractors.
The memorandum, issued with reference to directions from the Ministry of Labour & Employment (MoLE), aims to strengthen worker protection, ensure accountability of contractors and principal employers, and streamline compliance across government bodies.
Background:
On 21 November 2025, the Ministry of Labour & Employment implemented four Labour Codes:
Also Read: India Implements Four Labour Codes from 21 Nov 2025
These laws strengthen worker protection through improved wage security, expanded social security, and better working conditions, while making compliance critical for ministries and organizations engaging manpower through contractors or direct hiring. The requirement on minimum wages and timely payment flows from the Code on Wages, 2019.
Key Highlights:
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All ministries, departments, Central Public Sector Enterprises (CPSEs), and autonomous bodies are directed to ensure wages/salaries are paid on time as per statutory timelines.
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Contractors are directed to pay wages within prescribed timelines:
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Daily: End of shift
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Weekly: Before the weekly holiday
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Fortnightly: Within 2 days of the end of the fortnight
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Monthly: Within 7 days of the following month
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Even where workers are hired via contractors, the principal employer remains responsible for ensuring timely wage payments.
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All wage payments must be made through bank transfer or electronic modes and reported to the principal employer.
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DDOs are required to verify wage disbursement every month and monitor compliance using systems such as GeM and PFMS.
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All manpower contracts must include penalty clauses for delay or non-payment of wages by contractors.
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Departments must ensure adequate funds are maintained in advance for the entire contract period to avoid delays.
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Contractors must pay workers by the 7th of each month, submit bills by the 10th, and departments must clear payments by the 15th.
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If a contractor fails to pay, the principal employer must directly pay the workers as per the contract terms.
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Contractors violating payment obligations may be blacklisted, including across all ministries for repeated non-compliance.
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Secretaries of ministries and departments are required to regularly review compliance to ensure timely wage payments.
Also Read: Uttar Pradesh Revises Minimum Wages Following Industrial Unrest in Noida: Effective April 2026
[Office Memorandum on Timely Payment of Wages, issued on 8-5-2026]
