Government Tightens Labour Law Compliance for Public Contracts

Government Tightens Labour Law Compliance for Public Contracts
India's Finance Ministry has implemented a significant policy linking labour law violations directly to government procurement eligibility. Firms now face potential debarment up to three years for failing to pay wages or deposit social security contributions, marking a major shift in contractor accountability. The amended General Financial Rules require monthly wage payment verification by government officials and mandate timely disbursement under the Code on Wages 2019. This integration of labour compliance into bidding norms aims to protect outsourced and contractual workers across central ministries, departments, and public sector enterprises. The policy reflects government commitment to strengthening enforcement mechanisms and ensuring contractors meet statutory obligations.