The workers raised slogans against Pakistan and started kicking the flag, police said.
As they attempted to burn it, they were taken into custody, they said.
Two Indian soldiers, Naib Subedar Paramjeet Singh of 22 Sikh Infantry and Head Constable Prem Sagar of 200th Battalion of BSF, were beheaded by Pakistani forces in Poonch sector in Jammu and Kashmir on May 1.