Cabinet decision on contract staff replaces intermediaries with direct salary payment but is not a change of employment status

Following the recent cabinet decision on reorganising the payment system for contract staff, Iran's Administrative and Recruitment Organization stressed that the decision does not amount to a change in these employees' employment status and only reforms the way salaries and benefits are paid. The clarification was published on Saturday 1 August 2026 (10 Mordad 1405).

Under the decision, the salaries and benefits of contract staff will be paid directly so that intermediaries are removed and financial transparency, protection of employees' rights and fairness in the payment system are improved. The government says reducing the role of intermediary companies means a larger share of the funds reaches the employees themselves.

The Administrative and Recruitment Organization gave legal obstacles as the first reason why a change of employment status is not possible, saying higher level laws do not permit the wholesale conversion of contract staff. It cited the note to Article 32, Article 17 and clause B of Article 13 of the Civil Service Management Law, and Article 104 of the Seventh Development Plan Law.