In a historic decision for the welfare and rights of employees, the Punjab Vidhan Sabha on Monday unanimously passed the Punjab State Outsourced Personnel (Transition to Contractual Engagement) Bill, 2026, with CM Bhagwant Singh Mann announcing an end to the decades-old system of contractual outsourcing and exploitation of employees in government employment.
The landmark legislation will eliminate the role of private contractors, bring 26,000 to 28,000 outsourced employees into direct contractual engagement with the government in the first phase, and extend PF (Provident Fund), Gratuity, ESI (Employees’ State Insurance), Maternity Leave and Casual Leave benefits to eligible workers, while ensuring that the 15% to 22% commission charged by outsourcing agencies is no longer deducted from their earnings.
Addressing the Vidhan Sabha, CM Bhagwant Singh Mann said, “Punjab State Outsourced Personnel (Transition to Contractual Engagement) Bill, 2026 is a historic decision in favour of employees. This is one of the biggest decisions in Punjab’s history for the welfare and rights of employees. From today, the decades-old system of contractual outsourcing in Punjab will come to an end. The role of private contractors in government employment will be eliminated, establishing a direct relationship between the government and workers.”
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Highlighting the contribution of outsourced workers, the Chief Minister noted, “Thousands of contractual outsourced workers in Punjab have dedicated several years of their lives to serving the state. These workers have also made a significant contribution to Punjab’s progress and prosperity and to ensuring that the government’s welfare schemes reach those in need. However, the constant uncertainty created by the presence of contractors has always remained a sword hanging over the workers’ heads, adversely affecting their jobs and their lives.”
He affirmed, “Today, AAP government has given these workers what they truly deserve. These employees will no longer remain ‘Outsourced’; they will become ‘In-sourced’ employees, meaning they will become members of the government family.”
Describing the Bill as a step towards ending contractual exploitation, CM Bhagwant Singh Mann said, “It will end the exploitation of humans in the form of contractual service. Eligible outsourced employees working in government departments and government-controlled institutions will be brought directly under contractual engagement by the government.”
He pointed out, “The Bill will apply to eligible outsourced employees in Group-C and Group-D categories who are engaged in essential public services and fulfil the prescribed eligibility conditions. In the first phase, approximately 26,000 to 28,000 outsourced employees will immediately benefit from this initiative.”
Outlining the benefits for employees, CM Bhagwant Singh Mann said, “Remuneration paid to employees will not be less than their existing salary or the legally prescribed Minimum Wages, whichever is applicable. They will receive the benefits of Provident Fund (PF) and Gratuity, will be entitled to ESI benefits, will receive the benefit of Maternity Leave and, like regular employees, they will be entitled to 10 days of Casual Leave per year. Like regular employees, they will have an iHRMS account, ensuring greater transparency in their service records and employment.”
Emphasising the direct financial benefit to workers, CM Bhagwant Singh Mann said, “The 15% to 22% commission currently charged by outsourcing agencies will no longer be deducted as an agency commission and the corresponding benefit will accrue to the employees.”
