Dearness Allowance: Punjab Cabinet to discuss DA, DR, pay arrear, clears regularisation of over 65,000 employees—Details

The Punjab state government on 30 May announced that it will consider payment of pending dearness allowance (DA) and dearness relief (DR) dues of state government employees (across categories) and pensioners for the period between 1 July 2021 to 31 March 2024, according to a PTI report.

It also said that a sub-committee will discuss payment of arrears for employees and pensioners based on revised salary and pension benefits for the period between 1 January 2016 to 30 June 2021, it added.

The Cabinet has granted ex-post facto approval for the reconstitution of a Cabinet sub-committee comprising Finance Minister Harpal Singh Cheema and Cabinet Ministers Aman Arora and Baljit Kaur to examine issues related to pending arrears of revised pay, pensions, leave encashment and dearness allowance, it said.

These decisions were taken in a Cabinet meeting held in state capital Chandigarh under the chairmanship of Punjab Chief Minister Bhagwant Mann.

Punjab dismantles contractual employment system

The same day, the government added that it has approved the process to dismantle a decades-old contractual employment system and regularisation framework for over 65,000 workers across 51 government departments, as per the report.

• The Punjab Adhoc, Contractual, Daily Wage, Temporary, Work Charged and Outsourced Employees' Welfare Act, 2016 has been repealed.
• The Punjab State Outsourced Personnel (Transition to Contractual Engagement) Bill, 2026 and the Punjab Contractual Personnel (Absorption Against Sanctioned Vacancies) Bill, 2026 has been greenlit.

Speaking to reporters, Mann declared that move a historic decision that "we will end the contractual system" in the state. It effectively ends the role of private contractors in government employment and creates a direct employer-employee relationship between the state and workers, he added.

“The government has moved to provide job security, dignity and a clear pathway to permanent service for thousands of employees who spent years serving Punjab without regular status,” according to Mann. He added that an ordinance will be sent to the Punjab Governor for approval and then presented in the state assembly.

The implementation process would begin within 45 days of Cabinet approval and eligible categories would be notified in phases by the Departments of Personnel and Finance, the CMO release noted.

Punjab govt approvals: Here's all you need to know

• Under the Punjab State Outsourced Personnel (Transition to Contractual Engagement) Bill, 2026, outsourced Group C and Group D employees who have completed five years of continuous service will become contractual employees of the government.
• Workers whose daily duties involve danger — such as fire services personnel, PSPCL linemen, sewer workers, sanitation workers of urban local bodies, waste-handling workers and field complaint staff — will be eligible for the next rung after three years instead of five, he said.
• Direct state employment will be provided after five years of continuous outsourced service, he added.
• Thereafter, after completing 10 years of contractual service, employees will be considered for absorption against regular sanctioned posts, as proposed under the Punjab Contractual Personnel (Absorption Against Sanctioned Vacancies) Bill, 2026.

• Wages will be credited directly into employees' bank accounts without any agency deductions or commissions.
• Employees will receive statutory maternity benefits and 10 days of casual leave every calendar year.
• They will also be covered under biometric attendance system, Mann said.
• There will be transparency and protection from arbitrary action; no worker will be removed without reasons being recorded in writing and without being given an opportunity to be heard, he added.

Beneficiaries: Who is likely to be impacted?

“A total of 65,048 outsourced workers across 51 departments fall within the ambit of this reform and more than 26,000 workers will be among the first beneficiaries,” according to Mann. He added that workers performing duties involving risks to life and health will receive faster consideration under the policy.

• The reform will cover 15,753 workers in the power sector, including complaint-handling staff, PESCO employees, metre readers and nodal centre workers;
• 8,436 workers of local government departments — primarily sanitation staff;
• 8,373 workers in cooperative institutions including sugar mills, Spinfed and Markfed;
• 7,704 workers in school education;
• 4,746 workers in the Transport Department; and 1,472 outsourced fire personnel, the CMO office said.
• In addition, 2,688 workers of Health and Family Welfare,
• 1,575 workers of Water Supply and Sanitation,
• 1,533 workers of Agriculture,
• 1,311 workers of Jails,
• 1,251 workers of Technical Education,
• 1,570 workers of PWD (B&R),
• 1,322 workers of General Administration, and
• 1,231 workers of Medical Education Departments will also benefit from the reform.

(With inputs from PTI)

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