Navigating Labor Contracts: Do I Need a New License for a Second Company in the Same State?

Sir, I took a labor contract license for 40 members in one factory. I got another contract in a different area, in the same state. Is it necessary to take another license for the second company?

Dear Unicare,

As per the law, a labor license is project site-specific, so you have to take another license for the new work.

I agree with Mr. Kapil. Since the establishment and principal employer are different, you need to obtain another license.

Dear Mr. Mahesh,

I have a contradictory view to your statement. If the principal employer is the same but the site location is different, we still need to get registered under CLA.

Having contracts in different locations with one principal employer or different principal employers for your contracts, you have to get a separate license under the Contract Labour Act.

Srikanth
Sr. Executive - HR
+91 9963658111

Yes, you have to obtain another license for contract work at a different unit. You need to acquire Form V from the principal employer and complete other formalities such as obtaining a Work Order, specifying the Nature of Work, etc.

Abinash Sinha
9913804007

Hi Pramod,

Please obtain a labor contract license that is not specific to any particular company but is general, allowing you to employ your labor anywhere you need. Please confirm the number of workers required. My friend holds a labor license and uses it to work for multiple companies under the same license (he is involved in security services).

HR Executive
Sai Garden
9923017652

Under the Act, every establishment employing 20 or more persons as contract labor shall obtain a license. The license issued is location, activity, and organization-specific. If additional manpower is required for increased activity within the license for which it is issued, an amendment can be sought by paying the prescribed additional fee for increased strength along with an amendment to the registration of the employer (if the sanctioned number is less).

However, separate licenses are required for different contracts.

HC. Subbaramu
HRM & Labour Law Consultant
Bangalore

Hi everyone,

Currently in our organization, we have 2 contractors with 375 employees (175 and 200 each) employed for us. However, every month we experience fluctuations, with numbers increasing to 400 or decreasing to as low as 350. I kindly request suggestions on whether we should seek approval from the HR department regarding increasing the number of employees under contract. What are the obligations and procedures for the principal employer and contractors in case the number of employees needs to be increased?

Regards,
Manikumar

Dear Manikumar,

Good evening! Kindly suggest to your contractor to obtain a Labor License for the maximum number of contract labor employed per day. You do not need to seek any permission from the Labor Office regarding this matter.

Best regards,

Hiring Contractors Without a License

How many contractors can be hired in a company without a license? Please share your experience.

In cases of fresh/new contracts, my advice to you would be to suggest the contractor obtain a license for a maximum number (exceeding 400). This can be done by paying the prescribed fee applicable for this number bracket. If such contracts are in effect and the contractor is facing this situation, there is a provision under section 28 of the Contract Labour (R&A) Act, 1970 to apply for an amendment of the issued license.

Also, please ensure that your firm, as the Principal Employer (P.E), has a registration certificate for engaging more than 400 contract laborers. If not, you may have to request an amendment of the registration certificate by paying the prescribed fee and submitting an application for amendment to the Labor Office/Assistant Labor Commissioner.

Thank you.