In May 2026, the Ministry of Labour and Employment released updated safety-auditing guidelines for construction and infrastructure projects under the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Rules, 1996. The new framework tightens contractor accountability for on-site labour verification, worker-welfare fund deposits, and third-party safety certification.
Projects with budgets above ₹5 crore now face mandatory quarterly audits; smaller sites face biannual checks. Non-compliance carries penalties of ₹50,000 to ₹5 lakh per violation. The rules take full effect on 1 July 2026—giving contractors six weeks to align payroll systems, welfare-fund records and safety documentation.
Advisory
Construction sites must now engage NABL-accredited auditors to verify worker registrations, wage compliance, and site-safety protocols quarterly (for large projects) or biannually (smaller sites). Auditor reports must be filed with the state labour department within 30 days.
Contractors must deposit labour welfare contributions within 10 days of each monthly payroll cycle (down from 30 days). Projects worth ₹10 crore+ now face monthly fund reconciliation audits and e-portal filing mandates.
All construction workers must be registered in the state labour department's e-registry within 15 days of site commencement. Contractors cannot deploy unregistered or informally hired workers; penalties apply per worker per month.
Under the Building and Other Construction Workers Rules, 1996 (as amended May 2026), infrastructure companies and contractors are now directly liable for audit compliance, fund deposits and worker registry accuracy. State labour departments have been notified to conduct surprise inspections from 15 June onward. Vinayakam Consultants helps contractors audit their current payroll and welfare-fund systems, map gaps against the new checklist, prepare audit-ready documentation, and establish monthly compliance calendars to meet the 1 July deadline and avoid penalty notices.
Your action checklist
- Conduct an internal audit of all active construction sites: count registered workers, verify welfare-fund deposits for the last 12 months, and identify any unregistered or informal labour arrangements by 20 June 2026.
- Appoint an NABL-accredited safety auditor for each project site and schedule the first mandatory audit for late June, before the 1 July rule commencement.
- Reconcile monthly payroll records with state e-registry and building welfare fund portal; correct any missing or duplicate worker registrations and clear overdue fund deposits within 10 days.
- Document site safety protocols, equipment certifications, and worker-induction records; prepare a compliance calendar for quarterly (large projects) or biannual (smaller) audits and fund reconciliation through 2027.
Frequently asked questions
The May 2026 Building Code changes mandate mandatory third-party safety audits, tightened welfare fund deposit deadlines (10 days), worker e-registry registration within 15 days, and quarterly/biannual audits based on project budget. Full compliance is required by 1 July 2026.
Non-compliance carries penalties ranging from ₹50,000 to ₹5 lakh per violation, with additional penalties applied per unregistered worker per month.
Projects with budgets above ₹5 crore must undergo mandatory quarterly audits by NABL-accredited auditors. Projects below ₹5 crore face biannual audit requirements instead.