Contractor Licensing Concerns: What Should We Check as the Principal Employer?

Guidance Needed on Contractor Licensing

We are the principal employer with five units in Kolkata. We have engaged a contractor, ABC Ent., for housekeeping in our unit. The contractor has deployed nine laborers against a specific work order. The same contractor is also engaged in another unit of our company for the same job, deploying nine laborers there under a different work order. In total, the contractor has deployed 18 laborers across our company, evenly distributed in two different units and against two different work orders.

In addition to the above, the contractor is also engaging laborers with various other companies. Suppose ABC Enterprise has 60 laborers working in various companies, including ours.

Contractor's Licensing Liability

What will be the liability of the contractor concerning the contractor's licensing perspective? As the principal employer, what checks should we ensure regarding the contractor's license?

Regards,
SDG

It is better that the concerned contractor has a valid contract labour license. First of all, as a principal employer, you must have a license as per the rules to engage a contractor. You, as a principal employer, must issue Form V to the contractor to enable him to apply for the license. As the contract labour license is issued by the Contract Labour Inspector zone-wise, the contractor needs to get Form V from both of your units and apply for the license. As per the check, you should make it mandatory that before the issuance of a work order, the contractor should produce a valid contract labour license to the principal employer.

Regards,
Sudipta

You need to have a proper and valid legally drafted agreement with the contractor setting out the obligations clearly. It is mandatory for the contractor to follow all labor laws and also make provisions for gratuity and retrenchment compensation, as well as follow ESI and PF acts in letter and spirit. You should conduct a periodical audit of these compliances to indemnify yourself from lapses.