Understanding the Contract Labour Act: Do We Need These Registers for Permanent Employees?

Dear Cite HR Members, I am seeking your guidance on the definition of the Contract Labour Act. I work in a private company that provides services to various clients. Recently, we secured a significant housekeeping service contract with a pharmaceutical company. We deliver our services on a day-to-day basis with two of our permanent employees. The pharmaceutical company has requested certain documents in compliance with the Contract Labour Act register. However, as an employer, we provide services to the pharmaceutical company using our own permanent employees. The requested documents include:

- Copy of comm. / completion of contract in Form VI-A
- Service Certificate (Form - XV)
- Copy of Employment cards (Form-XIV)
- Register of Workmen (Form - XIII)
- In-out Register
- Muster Roll (Form - XVI)
- Register of Wages (Form - XVII)
- Register of Deductions (Form - XX)
- Register of Fines (Form - XXI)
- Register of Advances (Form - XXII)
- Register of Overtime (Form - XXIII)
- Wage slips (Form - XIX)
- Weekly Off observed for every SIX days of working
- Overtime not to exceed as mentioned in the Act
- Overtime paid double the rate of gross wages
- Employees working on-site are fewer or equal to the number mentioned in the License
- Contract Labour Half-Yearly Returns (Form - XXIV)

While we maintain most of these registers as per the shop and establishment Act, we do not have them as per the Contract Labour Act. Do we need to provide all these registers as per the Contract Labour Act for our permanent employees? I would appreciate your suggestions and input on this matter.

Regards, S. Rottela

Consult the Contract Labour Act

Request you to go through the Contract Labour Act as applicable or hire a consultant. You have to check whether this is subject to state law or central rule.

You are a contractor on the premises of PE. Your employees, whether they are permanent or temporary, direct or otherwise, who are working on the premises of PE are considered contract laborers, and the Contract Labour (Regulation and Abolition) Act (CLRA Act) is applicable to you. You are responsible for maintaining all the registers and forms as listed in your posting in respect of all such contract laborers on the premises of PE.

You are also responsible for ensuring compliance with PF, ESI, LWF, etc., if applicable to PE. If these regulations are applicable to you, there is no room for non-compliance. Additionally, you need to deduct Employment Tax of the local government, if applicable, and make the remittance accordingly.

Regards

Clarification on CLRA Act Applicability

With only two employees, the CLRA Act is not applicable to the Principal Employer (PE) unless they have contract labor in other areas exceeding 20 altogether. Confirm this. If yes, you have to show them all registers, which is mandatory as per the applicable rules under the CLRA Act.

Regards,
Varghese Mathew

Thank you for your valuable suggestions. I have understood the problem, and I will try to prepare all the required documents to fulfill their requirements as per the CL Act.

Regards,
S. Rottela

As a contractor, you are required to comply with all rules of the CLR&A Act. PE, being responsible for ensuring statutory compliance for all workers on their premises, must request all the necessary registers/documents as mentioned.

However, as you have indicated, you possess almost all the documents required by the S&E Act, you should not face any difficulty as the S&E and CLR&A Acts do not contradict in most cases. You must currently maintain all the aforementioned documents; you just need to identify and document each of them.

For instance, you are likely preparing a payroll sheet in Excel containing all wage details, Leave without Pay (LWP), Provident Fund (PF), Employee State Insurance (ESI), Professional Tax (PT), Labour Welfare Fund (LWF), taxes, etc., which will serve the following purposes:
1. Wages Register
2. Leave deductions
3. PF & ESI deductions
4. Minimum Wages
5. Overtime
6. Weekly Off
7. Payslips, etc.

You only need to keep hard copies of the required registers and ensure you have an appointment letter, employee ID card, etc.

If you require any further assistance or information, please feel free to reach out.

Best regards,
[Your Name]

Contract Labour Eligibility and Employer Liability

The contract labor is eligible for all the above from his employer, subject to the provisions of the relevant Acts. The principal employer is liable only for the payment of items coming under the definition of 'wages' under the POW Act if the contractor fails to pay.

Regards,
Varghese Mathew

Based on the definition of the Appropriate Government applicable to the company where you have a contract, you need to maintain the registers by deeming provision under the Contract Labour Act. If you have maintained all the registers under the Shop Act, there is no need to maintain them under the CL Act.

Furthermore, you have provided a list of registers with forms. If I am not wrong, the same pertains to the CL Act Central Rules, and some states have adopted the same form. Could you please provide information on the state where the Pharma Co is situated? This way, I can guide you on which form of register to maintain by referring to the State Rules applicable to the Pharma Co's location.

Regards,
Azim Charania

As per the CLRA Act, if you have more than 20 employees (which I hope you have), you need to maintain all the required statutory documents and registers as the act applies to you. If your Principal Employer asks for the same, kindly provide the documents (highlighting their names in the said records) to him for inspection. This will help avoid any liability as a Principal Employer.

Thank you.

I agree with your valuable advice. The contract worker is eligible for all statutory benefits. The contractor can pay only when the Principal Employer sanctions the amounts. If the PE has not given sanction, the contractor will not pay. When the workers file a petition, the PE and the Contractor are severally and totally liable for payments. Please correct me if I am wrong and share any other issues involved in the discussion.

Thanks,

AVGN Vara Prasad