Contractor's License Dilemma: Should We Apply in Tamil Nadu or Kolkata?

Our company is based in Kolkata, and we are going to start work as contractors in Tamil Nadu at the principal employer's site. We do not have an office in Tamil Nadu. Now, to obtain a contractor's license, do we have to apply for a license in Tamil Nadu or Kolkata?

Kindly inform me about this case; it would be very helpful.

Thanks & Regards,
Subharthi Mitra

I hope you have received the work order from your Principal Employer. You can form your team at that location. Please collect the copy of the Work Order, Form II (Certificate of Registration for Establishment), and Form V (Certificate from Principal Employer), and apply for the license. Fill out Form IV (Application for license under the Contract Labour Act), attach the WO Copy, Form II, Form V, pay the License Fee Challan, and the Labour Security Deposit Challan from the designated branch in your district where the work is to commence. Attach the original documents and submit everything to the ALC's Office in your workplace district. You will then receive the license.

Also, do not forget to obtain the license under the Interstate Migrant Workmen Act.

Thank you.

Thanks for the suggestion. However, as you said, to submit documents to ALC's Office of your workplace district. Now, 'workplace district' means Kolkata or Tamil Nadu as per my query.

Regards,
Subharthi Mitra

Workplace is where you are executing the contract work. If you are executing the contract work with the help of 20 or more employees, you need to obtain the license under the Contract Labour Act and comply with provisions under it and other applicable labor laws. For each workplace where you employ 20 or more persons, you need to obtain a separate license.

Nature of Contract Work

You have not mentioned the nature of your contract work. If it is construction or on a construction site, the BOCW Act is applicable to you. Under this Act, you need to obtain registration if you employ 10 or more persons. You also need to contribute towards Cess under this Act if the Principal Employer asks you to contribute.

Interstate Migrant Workmen Act

As stated by BOSS, the Interstate Migrant Workmen Act is applicable to you under certain circumstances. To get more details on it, please research on this site. There are numerous postings including those of BOSS as well as mine. If you do not find the information you need, please let us know.

Thank you.

Thank you for your suggestion. If the number of workers employed is under 20, do we still need to do the compliances?

Regards,
Subharthi Mitra

Licensing Requirements for Contractors in Kolkata and Tamil Nadu

Your Kolkata office will be covered under the Shops and Establishment Act, under which you must obtain a certificate of registration as it is your registered office. You will have to take a license for the work in Tamil Nadu, where you have planned to operate. If you plan to engage more than 20 workers on any day during your work tenure, then you must obtain a labor license. However, for an ISMW License, it is required for 10 or more workers. If you are awarded the contract, then the Principal Employer (PE) might have already included your name in the application along with the number of workers. Therefore, you must obtain the necessary licenses as advised by your PE.

The applicability of the ISMW Act is for five employees or more, not ten as mentioned by you. Furthermore, the ISMW Act is complex, requiring obtaining a license at the recruitment site by obtaining Form V from the employer of the establishment where the work will start and acquiring a license under the ISMW Act at the workplace by obtaining Form VI from the same employer.

Additionally, certain obligations such as providing displacement allowances (50% of the CL's monthly wages), inward/outward journey allowances, and wages from the recruitment date need to be fulfilled. There are various other requirements as well. As advised by some senior members, it is advisable to ensure a proper understanding of the Act before proceeding to obtain the necessary licenses.

Summary and Recommendations

In summary, it is recommended to first obtain a license under the CLRA Act as per your suggestion, if the labor strength is 20 or more. In this case, the license should be obtained in Tamil Nadu; however, the Act's applicability, whether Central or State, is contingent on the Establishment. The appropriate license should then be obtained accordingly. Regarding obtaining a license under the ISMW Act, it is advisable to consult with the Principal Employer and reach a decision only after thoroughly studying the act.

I hope this clarifies some of the doubts. If anyone still has questions, please feel free to contact me at [Phone Number Removed For Privacy Reasons].

With Regards,

P. Vathiraj
Associate Operations Manager
Aparajitha Corporate Services Limited