Is the principal employer liable if the contractor pays less than parity?

Not for the parity difference itself, on the Supreme Court's 1996 ruling in Hindustan Steelworks Construction v Commissioner of Labour: the licence condition bound the contractor, and section 21(4) of the Act reached only the wage the contractor had contracted to pay. The site was liable, and could recover from the contractor, for any gap between the rate in its own agreement and what was actually paid. The Codes put the same shape of liability in the Code on Wages section 43 proviso.

Does equal pay for equal work apply to private companies in India?

As a constitutional principle under Articles 14 and 39(d) it has been applied by the Supreme Court to government and public-sector employment, including temporary employees in State service in Jagjit Singh (2016). It is not a freestanding statutory right against a private employer. In private industry the routes to parity have been the licence condition on the contractor, the industrial tribunal, and the rate written into the work order. The Code on Wages prohibits wage discrimination on grounds of gender only.

What should a site put in the work order about contract wage rates?

The rate itself, by station, and the basis for it. Where contract and direct workers do the same or similar work, the least contested position is a contract wage rate matched to the direct hire's basic plus dearness allowance for the grade, with hours and holidays matched. Where the work is different, record why. The rate in the work order is what the site is liable for if the contractor underpays, so it should be one the site has checked against the contractor's monthly wage intimation.

Same work, same wage for contract workers?

Q: Do contract workers have to be paid the same as permanent workers doing the same job?

Under the repealed Contract Labour (Regulation and Abolition) Central Rules 1971, rule 25(2)(v)(a), it was a condition of the contractor's licence that workers doing the same or similar work as the principal employer's own workmen got the same wage rates, holidays, hours and conditions of service. Since 21 November 2025 the question depends on the licence conditions in the OSH Code rules that apply to the establishment, which for Tamil Nadu private sites were still pending at the time of writing. The minimum wage is the floor either way.

For the contractor, yes, where the work is the same or similar: under rule 25(2)(v)(a) of the Contract Labour (Regulation and Abolition) Central Rules 1971 it was a condition of the licence that contract workers doing the same or similar work as the site's own workmen got the same wage rates, holidays, hours and conditions of service. For the principal employer it was never a direct wage debt; the Supreme Court said so in 1996. The Act and its rules were repealed on 21 November 2025, and whether the condition survives in the OSH Code's licence is the question to settle with counsel before the next work order.

What the parity rule actually required

It required the contractor, as a licence condition, to match the principal employer's own terms for the same or similar work. Rule 25(2)(v)(a) of the Central Rules read: in cases where the workmen employed by the contractor perform the same or similar kind of work as the workmen directly employed by the principal employer of the establishment, the wage rates, holidays, hours of work and other conditions of service of the workmen of the contractor shall be the same as applicable to the workmen directly employed by the principal employer. Where the work was not the same or similar, clause (b) left the rates to be fixed by the Chief Labour Commissioner, or the Deputy or Regional Commissioner, and the licensing officer could insist on the outcome [VERIFY: clause (b) wording and the authority named]. The Tamil Nadu Contract Labour Rules 1975 carried the same condition for state-sphere establishments [VERIFY: rule number in the Tamil Nadu rules].

Three things about the wording matter on a real floor. It compared contract workers with the principal employer's own workmen, so a site with no direct hires on a function had nothing to match against. It reached wage rates, holidays, hours and conditions of service, not the statutory benefits that flow from the contractor as employer, so gratuity and bonus stayed the contractor's own calculation. And "same or similar kind of work" was a question of fact about the station, not the job title, which is why the argument on a mixed line was usually about whether a packer on the contract roll and a packer on the company roll were doing the same job.

What the principal employer owed, and did not

The site owed the wage the contractor had agreed to pay, not the parity difference. In Hindustan Steelworks Construction Ltd v Commissioner of Labour, decided on 3 September 1996, the Supreme Court set aside a High Court direction that the principal employer make good the gap between what contract workers were paid and what rule 25(2)(v)(a) would have given them. Section 21(4) of the Act, the Court held, made the principal employer liable for wages the contractor failed to pay in accordance with the Act, which meant the contracted wage; it did not turn a licence condition on the contractor into a debt on the site [VERIFY: citation, reported at 1996 (5) Supp SCR 447 and (1996) 10 SCC 599]. The site did remain liable, and could recover from the contractor, for any difference between the rate in its agreement with the contractor and the lesser rate the contractor actually paid.

What the Codes carry over

The Act and the 1971 Rules were repealed when the Codes commenced on 21 November 2025, and the parity rule has to be found again, if at all, in the licence conditions under the OSH Code. Section 47 of the Occupational Safety, Health and Working Conditions Code 2020 makes a contractor's licence subject to such conditions as may be prescribed, and the OSH (Central) Rules 2026, notified on 8 May 2026, set those conditions in rule 86, which secondary summaries describe as covering working hours and payment of wages in accordance with the Code on Wages 2019 [VERIFY: G.S.R. number; whether rule 86 reproduces the same-or-similar-work condition of the old rule 25(2)(v)(a), and in what words]. The Central Rules govern central-sphere establishments; a private factory or warehouse in Tamil Nadu waits on the State's own rules under the Code, which had not been finalised at the time of writing [VERIFY: status of the Tamil Nadu OSH rules].

Question	Under the CLRA regime (to 20 Nov 2025)	Under the Codes (from 21 Nov 2025)
Is parity a licence condition on the contractor?	Yes, Central Rules 1971 r.25(2)(v)(a); state rules mirrored it	Depends on the licence conditions in the applicable rules; OSH (Central) Rules 2026 r.86 for central sphere [VERIFY]; Tamil Nadu rules pending [VERIFY]
Is the site liable for the parity difference?	No: Hindustan Steelworks (SC, 1996); s.21(4) reached only the contracted wage	No equivalent ruling yet. Code on Wages s.43 proviso and OSH Code s.55 make the site pay what the contractor fails to pay under the Codes [VERIFY: s.55 number]; whether that reaches a licence-condition rate is untested
Is there a statutory floor either way?	Minimum Wages Act 1948 rates for the scheduled employment	Code on Wages s.5 and s.6: minimum wage under the appropriate Government's notification, plus the national floor wage under s.9 [VERIFY: section numbers]
Is there a statutory equal-pay rule?	Equal Remuneration Act 1976: gender only	Code on Wages s.3: no discrimination on grounds of gender in wages for the same or similar work; gender only
Do contract workers get the same welfare and safety cover as direct hires?	CLRA ss.16 to 19: canteen, rest rooms, drinking water, first aid via contractor, PE in default	Ministry OSH FAQ Q10: the Code does not distinguish regular, contract and migrant workers; Q16: welfare facilities provided by the principal employer

Two things are settled either way. The minimum wage for the scheduled employment is the floor, on the Code definition of wages, and the site is liable under the Code on Wages section 43 proviso when the contractor fails to pay it. And the Ministry's own FAQ on the OSH Code says the Code does not distinguish between regular and contract workers for the benefits it provides, which covers hours, leave, safety and welfare rather than the wage rate.

Equal pay for equal work as a principle

It is a constitutional principle that has been applied to government and public-sector employment, not a freestanding statutory right against a private principal employer. The Supreme Court read equal pay for equal work into Articles 14 and 39(d) in Randhir Singh v Union of India (1982), and in State of Punjab v Jagjit Singh (2016) held that temporary employees in the State's service doing the same duties as regular employees were entitled to the minimum of the regular pay scale [VERIFY: citations, (1982) 1 SCC 618 and (2016) SCC OnLine SC 1200]. Both were claims against the State as employer. In private manufacturing and logistics the route to parity has been the licence condition, the tribunal, and the work order, not a writ, and the Codes have not changed that.

Where the principle does bite on a private site is indirectly: a long-running gap between contract and direct rates on the same station is the fact pattern behind sham-contract and regularisation claims, where the argument is that the contract is a device and the workers are in substance the site's own. That is a different question from parity, and a bigger one, and it turns on control and supervision rather than on the rate.

What to do on a mixed floor

Decide station by station whether contract and direct workers are doing the same work, and write the answer and the rate into the work order. The parity question is unsettled under the Codes; the site's exposure to the rate in its own work order is not.

Map the stations. List every function where contract and direct hires work side by side. For each, record whether the work is the same or similar, on the task, the skill and the supervision, not on the job title. This is the note a licensing officer or a tribunal asks for first.
Set the contract rate against the direct base rate for those stations. Where the work is the same, the least contested position is a contract wage rate at the direct hire's basic plus dearness allowance for the grade, with holidays and hours matched; benefits that flow from the contractor as employer, such as bonus and gratuity, stay the contractor's calculation on the Code definition of wages. Where it is not the same, document why.
Put the rate in the work order. Hindustan Steelworks makes the rate in the site's own agreement the site's liability when the contractor underpays. That cuts both ways: a work order that names the rate creates an exposure, and one that leaves it to the contractor leaves the site unable to show what it required.
Reconcile the contractor's wage register to the work-order rate monthly. The electronic wage intimation the contractor sends under the OSH Code should tie to the rate agreed [VERIFY: s.55]. A gap here is the section 43 exposure, and it is the one the site can close by withholding the next invoice until it is paid.
Watch the licence conditions. Whatever the OSH (Central) Rules 2026 and the eventual Tamil Nadu rules say about same or similar work becomes a condition of the contractor's licence, and a breach is a revocation risk that stops the line. The contractor should be able to show its licence conditions and its compliance with them on request.

Whether a given station is same or similar work, and whether the Code-era licence conditions reproduce the old rule for a particular establishment, are questions on the facts for the site's own counsel.

Sources

Contract Labour (Regulation and Abolition) Central Rules, 1971, rule 25 — r.25(2)(v)(a) same or similar kind of work; r.25(2)(v)(b) rates fixed by the Commissioner where the work is not the same [VERIFY: text of clause (b) and the authority named; the repealed rules are cited for the pre-Code position]
Hindustan Steelworks Construction Ltd v The Commissioner of Labour and others, Supreme Court of India, 3 September 1996 — principal employer not liable under s.21(4) of the CLRA Act for the parity difference under r.25(2)(v)(a); liable for the gap between the contracted wage and the wage actually paid, recoverable from the contractor. Opened and read [VERIFY: reporter citation]
Occupational Safety, Health and Working Conditions Code, 2020 (Act 37 of 2020), Gazette text hosted by DGFASLI — s.47 licence and conditions; s.55 wages of contract labour and the principal employer's liability on the contractor's failure [VERIFY: s.55 number]
Occupational Safety, Health and Working Conditions (Central) Rules, 2026, notified 8 May 2026 — rule 86, conditions of a contractor's licence [VERIFY: G.S.R. number; whether the same-or-similar-work condition is reproduced]
The Code on Wages, 2019 (Act 29 of 2019), Gazette text hosted by the Ministry of Labour and Employment — s.3 (no gender discrimination in wages for the same or similar work), s.5 and s.6 (minimum wages), s.9 (floor wage), s.43 proviso (proprietor's liability on the employer's failure to pay) [VERIFY: section numbers for s.5, s.6 and s.9]
Ministry of Labour and Employment, FAQs on the OSH Code, 2020 (January 2026) — Q10 (the Code does not distinguish regular, contract and migrant workers), Q16 (welfare facilities provided by the principal employer)
Randhir Singh v Union of India, Supreme Court, 1982, and State of Punjab v Jagjit Singh, Supreme Court, 26 October 2016 — equal pay for equal work under Articles 14 and 39(d) in public employment [VERIFY: citations; judgments not opened this run]
Contract Labour (Regulation and Abolition) Tamil Nadu Rules, 1975 — state-sphere equivalent of r.25(2)(v)(a) [VERIFY: rule number; not opened this run]