How Can We Persuade Our Contractor to Obtain a Labor License Under the CLA Act?

Contract Labor Licensing Issue

Kindly clarify the following. We are an IT company. We have obtained registration under the CLA Act to engage contract labor for our group companies. We have engaged one contractor who is supplying manpower to our different establishments. Altogether, more than 20 contract laborers are working in our various establishments. Now, the question is, the contractor is denying taking a license from the authorities since he is supplying not more than 5 contract laborers to each establishment.

Under these circumstances, as the principal employer, how can we convince the contractor regarding this issue?

Regards,
RNS

Dear Mr. Narayana Swamy, The contractor does not need any license as he is engaging less than 20 employees in each branch. Licensing issues come into play when the number of employees deployed by the contractor is 20 or more at a single branch. We should not combine all the branches for the coverage of the Labor License.

Regards, Sankar

Dear Friend,

The contractor in your case is liable to take a license as he is providing the laborers under the same registration/establishment.

Regards

In my opinion, Mr. Sankar is right in clarifying that if different establishments are employing fewer than 20 contract workers through a contractor, possibly the same contractor, then in that case, the contractor is not required to take a license under the CL (R&A) Act, 1970. If none of your RC shows 20 workers' employment in any of the establishments, then why should he apply for a license?

With Regards,

R.N.Khola

The act applies to the concerned contractor if he is supplying 20 or more laborers to any employer of the organization. In fact, the organization itself needs to get registered under the provisions of CLA if they are employing more than 20 contract laborers in any individual industry/organization.

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Hi,

I have a query. We are an IT company employing 10 people, all on contract. Do we require any licenses?

Regards,
Hrishikesh

As you mentioned, you have various branches in different locations. Currently, only your registered office is registered under the CLR Act. This registration applies solely to your registered office area.

Now, if your branch offices are situated in different places, they need separate registrations for each location, especially if they are in different districts or states. It is crucial that the manpower supply contractor obtains a separate license for each location. You can refer to the contractor's license copy, specifically the second page, as it clearly specifies this requirement.

According to the act, the contractor must ensure that all 20 licenses are in place for coverage. However, the contractor may also secure temporary licenses for specific periods to ensure the safety of the employees under their supervision. For further clarification on this matter, please consult the nearest DCL office.

Regards,
PBS Kumar

Before asking the contractor to obtain a license, ensure that you have checked what your CLRA Registration certificate states:

1. The address at which the contract work is to be carried out.
2. The name and address of the contractor.
3. The nature of the contract work.
4. The maximum number of employees to be engaged in a day.

If you have an RC for 20 employees for a specific address to perform a particular task, then the contractor SHOULD acquire a license.

On the other hand, if your workplace is in different locations, you must obtain a separate RC for each location and indicate the actual number of employees engaged in the RC. In such scenarios, the contractor is not required to obtain a license. However, they are still obligated to adhere to the rules and regulations under the Act.

I agree with Mr. P.B.S. Kumar's version. A separate license needs to be obtained for each location unless they are all in the same location, and each location needs to have 20 or more employees. If the same contractor is providing manpower for all the locations and they are below 20, then a license is not required.

Regards,
Kameswarao

Registration Under CLRA for Contractors and Establishments

The establishment or contractor supplying 20 or more workers to another establishment should register under the CLRA. An establishment that engages 20 or more workers through one or more contractors should also have registration under the CLRA. Group companies with independent status should be treated independently when deciding on the employment of contract workers for each company or establishment.

Hi all,

If manpower is on a contract but engaged in an industry using power, hazardous chemicals, etc., then what? Please answer.

If the nature of work for which contract labor is employed through a contractor is not prohibited by the appropriate government notification, then you can provide manpower.

With Regards,
R.N.Khola

Dear All,

We have one more query! We have awarded three works to one contractor on our premises. The contractor has also obtained a contractor labor license under the act by combining the aforementioned works. Now, the enforcement officer is insisting on taking three separate licenses. Kindly clarify if it is required.

Regards,
RNS