No. Section 49 of the OSH Code 2020 says a contractor "shall not charge directly or indirectly, in whole or in part, any fee or commission from the contract labour". That covers a joining fee, a placement commission and a cut taken by a recruiter acting for the contractor. Other provisions close the routes round it: what a worker pays the employer counts as a wage deduction, and safety gear and medical checks are free by law.
What section 49 says, and who it binds
It binds every contractor to whom the contract labour Part of the Code applies, and the words leave little room. "Directly or indirectly" reaches a fee collected by an agent, a sub-agent or a village recruiter on the contractor's behalf, not just by the contractor's own office. "In whole or in part" reaches a fee split between the worker and someone else. The Code's definition of a contractor in section 2(1)(n) "includes a sub-contractor", so the ban follows the work down the chain.
The Part applies to every establishment with 50 or more contract labour on any day of the preceding twelve months, and to every manpower supply contractor that has employed 50 or more (s.45(1)). Below that size, the Code on Wages still treats any payment from a worker to the employer as a deduction, so the same fee runs into the deductions rules instead.
The common charges, and the rule each meets
Most charges to a worker fall under one of four provisions, and few survive all of them:
| Charge to the worker | Rule it meets | Where |
|---|---|---|
| Registration, joining or placement fee | No fee or commission, directly or indirectly | OSH Code s.49 |
| Recruiter's or agent's commission, paid by the worker | Indirect fee or commission | OSH Code s.49 |
| Helmets, safety shoes, gloves and other safety gear | No charge for anything provided for safety and health | OSH Code s.6(1)(g) |
| Pre-employment or periodic medical examination | No charge, including medical examination and tests for occupational disease | OSH Code s.6(1)(g) |
| Tools and raw materials the job needs | Not a "service" that can be recovered as an amenity | Code on Wages, Explanation to s.18(2)(e) |
| Uniform, ID card, or a cash "security deposit" from the worker | Any payment by the worker to the employer or its agent is a deduction, and must fit a listed purpose | Code on Wages, Explanation to s.18(1) |
| Travel to the site for an inter-State migrant worker | The employer pays a yearly lump sum for the to-and-fro journey home | OSH Code s.61 |
| A genuine salary or travel advance | Recoverable as an advance, within the deduction limits | Code on Wages s.18(2)(f), s.23 |
The advance is the line that matters in practice. A real advance is money the worker received and repays. A "joining advance" that the worker never received, recovered from the first month's wages, is a fee under another name. How each item is treated on a given site, and which deductions the government has authorised as amenities, is covered in our post on wage deductions.
What happens when a contractor charges
The contractor's licence is exposed first. Section 51(1)(b) lets the licensing authority revoke or suspend a licence, after a show-cause notice, where the holder has "contravened any of the provisions of this Part", and section 49 sits in that Part. That is "without prejudice to any other penalty" under the Code. A fee recovered through the payslip also breaches section 18 of the Code on Wages, which binds the contractor as an employer.
For the site, the risk sits with the crew as much as with the penalty. A worker who paid to get the job starts it in debt, and may still be repaying whoever recruited them out of wages the site's monthly audit never sees.
What a site should check
- Ask the workers, not the contractor. At induction and in a later spot check, ask in the workers' own language whether anyone was paid to get the job, and by whom.
- Read the deductions column. A line headed "recruitment", "registration", "deposit", "uniform" or "ID card" needs a clause behind it, and most will not have one.
- Check the first month's net pay. A first payslip far below the rest, with an unexplained recovery, is the usual sign of a fee collected through wages.
- Put the ban in the contract. A clause that the contractor and anyone recruiting for it will not charge workers, with the right to audit, gives the site a contractual answer as well as a statutory one.
- Confirm the free items are free. Safety gear, medical examinations and the tools the job needs should not appear anywhere in a worker's deductions.
How Velura Services helps
We do not charge any worker a fee or commission for a job, at recruitment, at deployment or afterwards, and the recruiters who work with us are bound by the same rule. Safety gear, medical checks and the tools a job needs are never recovered from wages. A site can ask our crew directly, in their own language, whether anyone was paid for the job.
Sources
- Occupational Safety, Health and Working Conditions Code, 2020 (Act 37 of 2020), Gazette text hosted by DGFASLI. Sections cited: s.2(1)(n) (contractor, including a sub-contractor), s.6(1)(g) (no charge for safety and health, including medical examination), s.45(1) (contract labour Part at fifty), s.49 (no fee or commission from contract labour), s.51(1)(b) (revocation or suspension of licence), s.61 (journey allowance for inter-State migrant workers). Opened and read.
- The Code on Wages, 2019 (Act 29 of 2019), Gazette text hosted by the Ministry of Labour and Employment. Section 18 (deductions only for listed purposes; any payment by the employee to the employer or its agent is a deduction; tools and raw materials are not "services"; advances), s.23 (recovery of advances). Opened and read.