India to Amend Contract Labor Act

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Sept. 28 – The Indian government is considering making changes to its Contract Labor Act of 1971 that would allow temporary workers to be paid the same wage rates and benefits as regular employees.

If the proposal is implemented, this will mean that temporary contract employees will also qualify for health and social security benefits.

“By one amendment, wages would increase,” Labor Secretary Prabhat Chaturvedi said. “The trade unions’ resistance to hiring contract workers will reduce and industry would get the flexibility it keeps asking for in hiring practices.”

The move is meant to address cases of violent worker unrest and prevent a labor crisis in the country. “Most contract workers are paid just 40 percent of regular wages with no social protection. To earn profit by exploiting labor isn’t desirable in a democratic country and welfare state,” Chaturvedi said.

“The law provides for paying at least the minimum wages to contract workers,” said a Confederation of Indian Industry official. “Industry strives to pay a little more, where possible, but to pay the same wages as regular workers would be difficult.”