How Do I Get a Contract Labor License and What Records Should I Keep?

Procedure for Obtaining a Contract Labor License

This is Shyam, working as an HR Officer in one of the manufacturing industries. I would like to know the total procedure for obtaining a contract labor license and what records need to be maintained for this.

Thanks & Regards,
Shyam V.

Workers above 20 in number must obtain a Contract Labor License from the designated Labor Commissioner's office. A shortcut is to hire a consultant, and they will facilitate the process. Alternatively, the detailed process is as follows:

Steps to Obtain a Contract Labor License

The Principal Employer must initially submit Form 2 to the Labor Commissioner, listing all the Contract Vendors. Subsequently, the Labor Commissioner will issue Form V to the Contractor along with the Work Order.

The Contractor is then required to submit a set of documents, including the original Form V, the work order, the fee amount, and various declarations such as the non-employment of child labor, to the designated Labor Commissioner. Upon review, the Labor Commissioner will issue a Labor License valid for one year.

The applicable fee is determined by the number of workers employed at the Principal Employer's site.

You have to approach the nearest Labour Commissioner's office or check the coverage area of your office to complete the formalities for obtaining the registration certificate, address proof, PAN card, etc. Nowadays, a licensing fee of Rs. 50 per head is being charged.

Please ensure you have all the necessary documents ready for the process.

Thank you.

The Contract Labour (Regulation & Abolition) Act, 1970 is applicable to establishments employing twenty or more workmen as contract labour. Such establishments need to apply for registration with the labor department (state or Central, as the case may be) in Form-I. A labor license is required to be obtained by the contractor engaged by you if he is employing twenty or more workmen as contract labour. There are a number of records/registers required to be maintained mainly by the contractor. The contractor shall have to send a Half-Yearly return to the officials of the labor department. Similarly, the employer has to submit an Annual return to the officials of the labor department. You have certain obligations as a Principal Employer under the Act and rules.

I suggest you purchase a book on the Contract Labour (Regulation & Abolition) Act, 1970 with rules of the state where your establishment is situated, as it is a comprehensive Act that cannot be explained here in much detail.

Regards,
BS Kalsi

Whether your firm is a manufacturing unit or not, you have to obtain a factory license, not a contract labor license. The contract labor license is applicable for those who engage labor on a temporary basis for work carried out in a factory or elsewhere, under the work awarded by the principal employer.

The roles of the principal employer and contractor are distinct in any factory or undertaking.

If you need any further details, please contact [Email Removed For Privacy Reasons] or [Phone Number Removed For Privacy Reasons].

Regards.

Mr. Shyam is inquiring about the contract labor license. If he is engaging 20 or more contract laborers through a contractor, what he needs is not a license but registration. The license is for the contractor. Shyam has to apply in the prescribed form with fees to the registration officer of the area. For details, he has to refer to the AP Rules under the CLRA Act.

Regards,
Varghese Mathew
[Phone Number Removed For Privacy Reasons]

The following Registers and Records are to be maintained either by the Contractor or by the Principal Employer:

1. **Register of Contractors** - Every Principal Employer shall maintain such a register in Form-XII.

2. **Register of Persons Employed** - Every contractor shall maintain such a register in Form-XIII.

3. **Employment Card** - Every contractor shall issue an Employment card to its workmen in Form-XIV.

4. **Other Registers to be Maintained by the Contractor:**
- Muster Roll (Form-XVI) OR Register of Wages-cum-Muster Roll (Form-XVIII)
- Register of Wages (Form-XVII)
- Register of Deductions for Damage or Loss (Form-XX)
- Register of Fines (Form-XXI)
- Register of Advances (Form-XXII)
- Register of Overtime (Form-XXIII)

5. **Wage Slips** - The contractor shall issue Wage Slips to their workmen in Form-XIX.

a) Every contractor shall send a half-yearly return in Form-XXIV so as to reach the Licensing Officer not later than 30 days from the close of the half-year.

b) Every Principal Employer shall send annually a return in Form-XXV (in duplicate) so as to reach the Registering Officer not later than 15th February following the end of the year to which it relates.

I hope you will now be satisfied.

Regards