Mahalsa Services faces allegations of underpaying workers, violating labor laws, and breaching government contract terms.

THE Labor Commissioner has ordered an inquiry into the exploitation of contract workers by Mahalsa Services. This contractor has the contract for housekeeping in the Health Directorate building. This follows the statement by Chief Minister Dr Pramod Sawant on the exploitation of contract workers by private parties.
Under the Goa Labor Act, a contract worker had to be paid Variable Dearness Allowance (VDA), bonus, and must be given access to the employee’s insurance ESIS. They also have to be given one paid holiday every week and 15 days’ holidays in a year.
IT is claimed that Mahalsa, which is dramatically under-quoting for housekeeping jobs, does not extend any of the statutory benefits to its largely women’s labor workforce. The irony is that the owner of Mahalsa services claims to be a BJP karyakarta. Reportedly very close to national president of the BJP, VP Nadda, he was also former union health minister.
The Directorate of Health Services is not able to take any action due to the high contacts of the Mahalsa boss. Needless to say this is affecting the quality of the housekeeping services in at Primary Health Centers and the district hospitals, which are managed by Mahalsa.

TENDERS TO UNDERCUT COMPETITORS
NOW a serious controversy has emerged over the awarding of a government contract for housekeeping services in Goa’s public health sector, with Mahalsa Services, the appointed contractor, accused of multiple violations of labor laws and tender conditions.
According to documents and wage registers reviewed, Mahalsa Services, which won the tender 10.10.2017 from the Directorate of Health Services, Government of Goa for “Environmental Support Services (Up-Keeping)” across various hospitals and public health centers in the state, has allegedly failed to comply with the Govt of India Minimum Wages Act, 1948 by paying workers significantly below the mandated wage rate.
Daily minimum wages for workers is periodically updated by the government, and it is the responsibility of the contractor to ensure that the wages are paid accordingly. As per the latest government notification dated October 1, 2024 the minimum daily wage is Rs 534 (Rs 407 basic + Rs 127 VDA). In simple words it means, every month a worker must be paid a minimum gross wage of Rs13,884 with Rs12,103 as the in-hand salary.
But a quick look at the wage records from PHC Dharbandora and PHC Bicholim reportedly show that Mahalsa Services pays workers only Rs 399 per day—a Rs 135 daily shortfall per employee. This means a worker loses approximately Rs3,500 per month. Add to it the additional savings he earns in the form of statutory compliance (pf,esi.bonus,leave) and the monthly loss for a worker is appx Rs 4,500. Where is the money going? “I get appx Rs9,000 per month in hand. Any leave we take is deducted and we pay for all medical expenses. What is ESI?” asked a daily wage worker working under Mahalsa Services at PHC Dharbandora.
Mahalsa services has contractors with over 42 small hospitals and public health centers in Goa hiring appx 320 number of workers. More than 90% of these workers are local Goans, mainly women.
PF & ESI are mandatory savings for daily wage workers. Besides this the workers must also be given 15 days of paid leave per year, a fixed Bonus of Rs7,000 per year and other welfare benefits like free medicines, children scholarships, etc. Workers working for Mahalsa seem to be unaware of any of these benefits. “Pf/Esi, Bonus, etc, are all compulsory and needed for the wellbeing of workers. If a contractor is not following these rules he must be stripped off his labour license,” said a senior official from the Labor Department, government of Goa. Goan Observer was unable to retrieve any documents like payment challans that show proof of pf/esi payments made by Mahalsa on behalf of his workers.
Mahalsa Services is also accused of failing to meet other obligations under multiple statutes, including:
Payment of Wages Act, 1936 – for alleged delayed payments and illegal deductions
Employees’ Provident Fund (EPF) Act, 1952 – for under reporting wages and lowering government contributions
Employees’ State Insurance (ESI) Act, 1948 – for not enrolling eligible employees and failing to pay insurance dues
These alleged violations directly impact not only the workers’ financial well-being but also their access to health care, retirement savings, and other statutory benefits.

Breach of Contractual Obligations
ALL tenders in Goa follow the lowest bidder formula. This means that a tender is awarded to that contractor who bids the lowest amount for undertaking a said job. But the tenders floated by Government of Goa clearly states that the bidder must fully comply with labour, wage, PF, and ESI laws, and maintain valid licenses under the Contract Labour (Regulation & Abolition) Act, 1970. Non-compliance constitutes a breach of contract, and Mahalsa Services violates many of these provisions.
“Given the nature of this housekeeping contract in sensitive institutions like hospitals, adherence to labor laws is not a formality but a legal and ethical necessity,” said one observer from a tender committee.

Call for Immediate Action
HOUSEKEEPING and cleaning services are essential to maintain the well-being of the society. These services assume more importance when being carried out in critical areas like government hospitals which is frequented by a large segment of the society. Services here must not be provided by a repeat offender as it has a direct impact on the health of the society. It is necessary that a full investigation into the company’s labor practices.
Authorities must take action to verify wage registers, enforce statutory dues, and ensure affected workers receive rightful arrears. And until such time the state government must take strict action like suspension of his contracts for an un-biased investigation.
AS of this writing, no official comment has been received from the Directorate of Health Services or representatives of Mahalsa Services.