The Punjab Vidhan Sabha unanimously passed the Punjab State Outsourced Personnel (Transition to Contractual Engagement) Bill, 2026 on 10 August 2026, clearing the way to bring an estimated 26,000 to 28,000 outsourced workers into direct contractual engagement with the state government in the first phase.
Finance Minister Harpal Singh Cheema presented the Bill in the House on the concluding day of the Monsoon Session. It applies to eligible outsourced employees in the Group C and Group D categories who are engaged in essential public services and meet the prescribed eligibility conditions. Under the new law, these workers will be engaged directly by the Punjab Government rather than through third-party agencies.
The legislation extends statutory benefits including Provident Fund, gratuity, Employees’ State Insurance, and maternity and casual leave to eligible workers. It also ends the commission of 15% to 22% that outsourcing agencies had been deducting from workers’ earnings. The Bill was published in the Punjab Government Gazette (Extraordinary) dated 7 August 2026 as Bill No. 17-PLA-2026, and now awaits the assent of the Governor of Punjab before it becomes law.
Leading the debate, Chief Minister Bhagwant Mann described the measure as a step toward ending contractual exploitation. “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,” he told the House. He added, “These employees will no longer remain outsourced; they will now become members of the government family.”
A second Bill, the Punjab State Contractual Personnel Bill, which was to provide for the regularisation of these workers’ services, was not tabled during the session. Cheema said it would be brought later without specifying a timeline. Both measures had been approved by the Punjab Cabinet as Ordinances in May 2026, before the Governor asked the government to bring them as legislation before the Assembly.
