Is a Labor License Needed for Contractors with Less Than 20 Workers Under the Contract Labour Act?

Please let me know whether it is a compulsory requirement for a contractor to obtain a labor license if they deploy fewer than 20 workmen on any day of the preceding twelve months under the Contract Labour (R&A) Act, 1970.

The contractor is liable to obtain a license under the CLRA if he employs more than 20 employees. In one or two states, this threshold is set at more than 10 employees. Being liable means it is compulsory or mandatory.

If the number of employees is less than 20 or 10, the contractor cannot apply, and no license can be granted to him.

Thank you.

If a contractor receives two different orders from the same establishment for two different works, and the total number of laborers for each order is less than 20, does he have to get the labor license then?

Yes, in this case, when the number exceeds 20 in one establishment, he needs to get a license. However, it is still advisable to obtain a license based on Form V issued by the employer, as you can employ fewer than the licensed number in any case.

Contract Labour License Requirements

Under the Contract Labour Act, if a contractor employs 20 or more contract laborers for one work or a combination of works, they will require a contract labour license. If the contractor is bringing labor from a different state, they will also require registration or a license under the Inter-State Migration Act. However, in some states, it is applicable even for fewer than 20 individuals. State rules should be referred to for that.

Regards,
Mritunjay Nath Sahu GM(HR)