Punjab Ends Contract Employees Law for Regularization
The Punjab government has decided to repeal the law that allowed contract employees to be granted permanent status in government departments.
The development marks a major shift in the province’s employment policy and aims to reduce financial pressure on the public exchequer.
According to official sources, the government will abolish the Punjab Regulation of Service Act 2019, which provided a legal framework for regularizing contract employees.
After its repeal, no government department in Punjab will be permitted to grant permanent status to contractual staff in the future.
Officials confirmed that future hiring will no longer be based on contract appointments with basic pay scales. Instead, new contract employees will be recruited on a lump-sum salary structure.
Read More: KP Launches New Salary Payment System for Employees
The change is expected to help the provincial government manage its growing salary and pension expenses more effectively.
The decision is part of broader financial reforms aimed at making public sector spending more sustainable while streamlining recruitment and compensation mechanisms across Punjab’s departments.
Earlier this year, the provincial government announced a 10 percent ad hoc relief allowance for civil servants from Grade 1 to 22.
According to a notification from the provincial finance department, retired employees will also receive a 5 percent pension increase.
The Ministry of Finance also confirmed that the raise applies to contract-based staff. Additionally, a 30 percent disparity allowance was approved for employees who were not previously eligible for this benefit.
