Background
Under Section 13 of the Contract Labour (Regulation and Abolition) Act, 1970, a licence granted to a contractor is subject to conditions as to, among other things, the fixation of wages, and Rule 25 of the Contract Labour (Regulation and Abolition) (Gujarat) Rules, 1972 prescribes those licence conditions. Condition (4) of the licence requires contractors engaged in employments scheduled under the Minimum Wages Act, 1948 to pay the minimum wages and special allowance notified by the Government for that employment, while Condition (6) empowers the Labour Commissioner, Gujarat State, to fix the rates of wages payable to contract workers in employments that are not covered by the Schedule to the Minimum Wages Act, 1948.
Exercising this power, the Office of the Labour Commissioner, Gujarat State, Gandhinagar, issued Circular No. Shra.A.K/T-3/2026/525 dated October 5, 2026, which
Applicability
The circular applies to all contractors in the State of Gujarat holding a licence under the Contract Labour (Regulation and Abolition) Act, 1970 and the Gujarat Rules, 1972 who engage contract workers in any employment that is not a scheduled employment under the Minimum Wages Act, 1948, and, by virtue of Section 21 of the Act, to the principal employers in whose establishments such contract workers are deployed. Contractors engaging contract workers in scheduled employments continue to be governed by the minimum wages and special allowance notified for the respective scheduled employment, as required by Condition (4) of the licence.
Compliance Requirements
Contract workers employed in employments outside the Schedule to the Minimum Wages Act, 1948 must be paid at least the following basic daily wage rates, which have been in force from April 24, 2023 and remain unchanged under this circular:
Category of Worker | Zone-1 (₹ per day) | Zone-2 (₹ per day) |
Skilled | 474.00 | 462.00 |
Semi-skilled | 462.00 | 452.00 |
Unskilled | 452.00 | 441.00 |
In addition to the basic wage rates above, contractors must pay contract workers a Special Allowance linked to the cost-of-living index. For the six-month period from October 1, 2026 to March 31, 2027, the Special Allowance is fixed at ₹72.50 per day, uniformly across all skill categories and both zones. The resulting minimum total daily wage is as follows:
Category of Worker | Zone-1 – Total (₹ per day) | Zone-2 – Total (₹ per day) |
Skilled | 546.50 | 534.50 |
Semi-skilled | 534.50 | 524.50 |
Unskilled | 524.50 | 513.50 |
Zone-1 covers areas within the limits of municipal corporations constituted under the Gujarat Provincial Municipal Corporations Act, 1949, areas within the limits of municipalities (nagarpalikas) constituted under the Gujarat Municipalities Act, 1963, and areas falling within the jurisdiction of the related urban development authorities. Zone-2 covers all other areas of the State of Gujarat not included in Zone-1. The applicable rate is determined by the zone in which the contract worker is employed.
Where contract workers are engaged in an employment covered by the Schedule to the Minimum Wages Act, 1948, the rates in this circular do not apply. The contractor must instead pay the minimum wage rates fixed by the Government in the notification for that scheduled employment, together with the special allowance declared from time to time for that employment. The special allowance for scheduled employments for October 1, 2026 to March 31, 2027 is notified separately by the Labour Commissioner and should be referred to directly for each employment.
Penalty and Consequences
Under Section 23 of the Contract Labour (Regulation and Abolition) Act, 1970, any person who contravenes a provision of the Act or rules regulating the employment of contract labour, or contravenes any condition of a licence granted under the Act, is punishable with imprisonment for a term extending up to three months, or with fine extending up to ₹1,000, or with both, and, in the case of a continuing contravention, with an additional fine extending up to ₹100 for every day the contravention continues after the first conviction.
Under Section 24 of the Act, any person who contravenes any other provision of the Act or rules for which no other penalty is provided is punishable with imprisonment for a term extending up to three months, or with fine extending up to ₹1,000, or with both.
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