Nothing in the labour codes calls for it. A contractor needs a worker's details for the appointment letter and the PF and ESI records, and a copy does that job. Keeping originals, taking a cash deposit or signing a worker to a bond in order to stop them leaving is another matter: wage law limits the money side, and restricting a worker's freedom to leave can bring the Bonded Labour System (Abolition) Act 1976 into play.
What a contractor actually needs
To see the documents and record the details, not to keep them. Rule 6 of the OSH (Central) Rules 2026 lists what goes in the appointment letter: name, date of birth, a parent's name, Aadhaar number after obtaining consent, UAN or ESIC number if available, designation and wages. Enrolment in PF and ESI needs the same identity details. We found no provision in the OSH Code, the Code on Wages or the Central Rules that requires an employer to hold a worker's original certificates or identity papers.
So the ordinary practice is to check the original, take a copy and hand the original back the same day. A contractor that keeps originals "for safe custody" should be able to say why, and the worker should be able to have them back on asking.
Deposits, bonds and penalties
Most of the ways of holding a worker in place run into a specific rule:
| Practice | Rule it meets | Where |
|---|---|---|
| A cash "security deposit" from the worker | Any payment by an employee to the employer or its agent counts as a deduction, and must fit a listed purpose; no fee or commission may be charged to contract labour | Code on Wages, Explanation to s.18(1); OSH Code s.49 |
| Recovering training cost from wages if the worker leaves early | Deductions are limited to the purposes the Code lists, and all deductions cannot exceed 50% of the wages | Code on Wages s.18(1)–(3) |
| A bond with a fixed sum for leaving early | A court awards reasonable compensation, not automatically the sum named | Indian Contract Act 1872, s.74 |
| A term barring work for anyone else after leaving | An agreement restraining a lawful profession, trade or business is void to that extent | Indian Contract Act 1872, s.27 |
| Holding back final wages until a worker "clears" something | Wages are due within two working days of removal, dismissal, retrenchment or resignation | Code on Wages s.17(2) |
| An undertaking giving up wages due | Void so far as it removes or reduces liability to pay an amount under the Code | Code on Wages s.60 |
A genuine advance is different: money the worker actually received can be recovered from wages (Code on Wages s.18(2)(f)), within the limits. What matters is that the recovery does not turn into a reason the worker cannot leave.
When it stops being a paperwork issue
When the worker cannot walk away. The Bonded Labour System (Abolition) Act 1976 defines the bonded labour system in section 2(g) as forced or partly forced labour under an agreement, including one made in consideration of an advance or any economic consideration, under which a person forfeits "the freedom of employment or other means of livelihood" or "the right to move freely throughout the territory of India", or works for no or nominal wages. An Explanation added in 1985 says this covers contract labour and inter-State migrant workers who are subjected to those conditions.
Compelling someone to render bonded labour, advancing a bonded debt, and enforcing such an agreement each carry up to three years' imprisonment and a fine (ss.16–18). Unlawfully compelling a person to labour against their will is also an offence under section 146 of the Bharatiya Nyaya Sanhita 2023 [VERIFY: section text and punishment against the official copy].
What a worker should get on leaving
- Their papers. Every original, returned without conditions.
- Their wages. Within two working days of leaving (Code on Wages s.17(2)).
- A service certificate. Where the Model Standing Orders 2026 apply, every worker is entitled to one stating the nature of work, designation and period of employment, issued within ten days (Schedule B).
- Their PF and ESI numbers. These stay with the worker, so the next employer can continue them.
What a site should check
- Ask the workers. In their own language, away from supervisors: does anyone hold your certificates, ID or bank card? Did you sign anything about leaving?
- Read the contractor's onboarding pack. It should show copies, consent for Aadhaar, and no bond or deposit form.
- Read the deductions column. Lines headed "deposit", "bond" or "training" need a clause of section 18 behind them.
- Watch inter-State crews most closely. They have the fewest options if their papers or wages are held.
- Put it in the contract. A term that the contractor and its agents will not hold originals, take deposits or take bonds from workers, with a right to check.
How Velura Services helps
We check a worker's documents at onboarding, keep copies and hand the originals straight back. We do not take bonds, cash deposits or undertakings from workers. A worker who leaves gets their dues and their service record, and a site can ask our crew directly, in their own language, whether anyone holds their papers.
Sources
- The Bonded Labour System (Abolition) Act, 1976 (Act 19 of 1976), copy hosted by the Haryana Labour Department. Sections cited: s.2(g) and its Explanation (bonded labour system; contract labour and inter-State migrant workmen), ss.16–18 (punishments). Opened and read.
- The Code on Wages, 2019 (Act 29 of 2019), Gazette text hosted by the Ministry of Labour and Employment. Sections cited: s.17(2) (wages within two working days), s.18 (deductions; payments deemed deductions; advances; 50% ceiling), s.60 (contracting out). Opened and read.
- Occupational Safety, Health and Working Conditions Code, 2020 (Act 37 of 2020), Gazette text hosted by DGFASLI. Section 49 (no fee or commission from contract labour). Opened and read.
- Occupational Safety, Health and Working Conditions (Central) Rules, 2026, G.S.R. 345(E) dated 8 May 2026, mirrored copy of the Gazette. Rule 6 (contents of the appointment letter). Opened and read [VERIFY: against the e-Gazette original].
- The Indian Contract Act, 1872 (Act 9 of 1872), India Code. Sections cited: s.27 (restraint of trade), s.74 (compensation where a sum is named). Opened and read.
- Model Standing Orders, 2026, S.O. 2312(E) dated 8 May 2026. Schedule B (service certificate within ten days). Opened and read [VERIFY: against the e-Gazette original].
- Bharatiya Nyaya Sanhita, 2023 (Act 45 of 2023), s.146 (unlawful compulsory labour). Official text could not be opened for this post [VERIFY].