Does Our Service Provider Need a Contractor's License for 8 Employees on Site?

Dear All,

We have a service provider with 8 employees deployed at our site. In total, he may have more than 20 employees in this state (UP). Does he need to have a contractor's license, or is it specific to the site or client? Kindly clarify. He says that he has deployed only 8 persons and does not require the mentioned license.

Regards,

Dear,

If a contractor engages more than 20 manpower, then only it's required to have a license. However, the contractor has to maintain the registers as per the CLA.

Dear Member,

The contractor is correct in stating that he is not covered under The Contract Labour (R & A) Act, 1970 as he is not employing 20 or more contract workers at your site/establishment.

With Regards,
R.N.Khola

Dear Sir,

If the principal employer is covered under a labor license under state/central rules, then automatically the contractor obtains the labor license, as per my knowledge. The contractor obtains Form IV under the Contract Labor Act, and then the Principal Employer issues Form V along with related documents (such as his labor license, joint undertaking form). Both of these are submitted to the labor office along with specific fees, and then the Labor office issues the License under Form VI.

Once you obtain the labor license, the contractor is responsible for maintaining the muster roll and wage register under the Contract Labor Act of 1970.

This information is provided to the best of my knowledge. If you have any queries, please feel free to get in touch with me on my cell number mentioned below.

Thanks & Regards,
KPK Sarma
Sr. Officer - HR
One of the reputed Manufacturing Organizations
Cell: 9160019220

Dear Khola ji,

Here is a slightly different case. The contractor is sending only 8 persons to each site at different locations. Likewise, he sends his men to 3 sites. So the total strength is (3x8=24). His overall strength is 24; however, his site-specific strength is not more than 8.

However, the contractor is voluntarily willing to get the CLA License for each site. Can the principal employer issue Form 5 to the contractor even if the strength is less than 20 at his site, for voluntary reasons? Please clarify.

The contract labor license is work-specific and is issued only against Form V from the respective Principal Employers. For 8 persons deployed to a particular site, no labor license will be required. However, the Principal Employer should ensure payment of social benefits like PF/ESI for these 8 contract employees.

ESIC has revised its limitations. Now it will be applicable for Gross Monthly Pay (GPM) of 15,000/-

Please comment?

Dear Member,

In my opinion, just like the PF Act, we are not in a position to have voluntary coverage under the Contract Labour (R&A) Act, 1970.

With Regards,
R.N.Khola

Dear All,

With reference to the above discussion, if a contractor engages more than 20 employees at one site, then only can they take a labor license. However, before that, the principal employer has to amend their registration certificate for that specific contractor. This amendment should include the location, nature of work, contract period, the number of employees, and the number of employees' spouses engaged.

Dear Mr. Sharma,

The principal employer has to amend their certificate and issue Form V to the contractor. Only then will the contractor be eligible to obtain a labor license (Form IV).