Central Association of Private Security Industry - Recent Disparity in Payment Provisions under the Code of Wages Act

New Delhi – The Central Association of Private Security Industry (CAPSI) has raised concerns about a serious anomaly within the provisions of the Code of Wages Act. This anomaly has created an imbalance in the payment process between principal employers and contractors, potentially leading to dire consequences for service providers across the country. CAPSI has made a representation to the Prime Minister and the Labour Minister, urging their immediate attention.

This issue imposes a significant financial burden on service providers, particularly small and medium enterprises (SMEs), and requires prompt intervention. If not resolved, thousands of Private Security Agencies will face Shut Down if payment provisions not amended.

Under the current provisions of the Code of Wages Act, principal employers are required to clear invoices issued by contractors by the 7th of each month. Meanwhile, contractors must pay wages to their employees by the 10th of each month or face penalties. Unfortunately, there are no penalties for principal employers if they fail to pay contractors by the specified deadline, creating an imbalance that adversely affects service providers.

The Central Association of Private Security Industry calls for the introduction of penalties for principal employers who do not meet their payment obligations.

Kunwar Vikram Singh, Chairman CAPSI said, establishing a fair and equitable framework that holds both principal employers and contractors accountable for timely payments is essential. This change will safeguard the interests of service providers and foster a healthy business environment, contributing to the overall growth and development of the economy.

We remain optimistic that under the leadership of the Hon’ble Prime Minister and Hon’ble Minister of Labour, the necessary amendments will be made to ensure the welfare and prosperity of all stakeholders involved.