Navigating Factory Registration and Leave Payment Compliance: What Are the Rules?

My factory is registered under the Factory Act. Here, we don't have contract labor. Please guide me on how to register the factory under the government labor department.

Leave Payment Compliance

My factory is registered under the FA Act. We are paying leaves as per the FA Act. I want to know if it is necessary to pay the leaves as per other acts like the Shop & Establishment Act. Please explain the rules regarding SL, PL, and CL leaves.

Regards,
Ramesh

If you want to deploy contract labor in your factory, then first of all, you have to register your unit under the Contract Labour Act. Second, you have to understand the difference between the Factory Act and the Shop and Establishment Act. If you are registered under the Factory Act, then obviously, you have to follow the rules that come under the Factory Act and not any other act. Both acts are totally different. You have to only follow the Factory Act.

Thank you; I appreciate your immediate reply. You have clarified the second point, but I am still confused about the first point. If we are employing direct labor, what is the intimation procedure to the government labor? Is there any ready format for this?

With regards,
Ramesh Lawande

Your unit is already registered under the Factory Act. Now, you need to determine how many employees you can hire; this information should be clearly outlined in your factory license.

If you are appointing employees directly and are registered under the Factories Act, there is no need to register with the Labour department. However, you must maintain all the registers prescribed under acts such as the Attendance Register, Wage Register, Leave Register, Bonus Register, etc., and these will be verified by Labour department officials under the Minimum Wages Act and other related Acts.

Engaging Contract Labor

If you want to engage contract labor, you should obtain a Principal Employer License. You can engage contractors, and they must obtain a Contract Labor License. You should comply with the provisions of the said Act.

Regards,
AVGN Vara Prasad

The Factory Act is different from the Shop and Establishment Act. If one goes through the Factories Act, one will understand all the important aspects such as leave, working hours, extra working hours, payment, etc. Leave with wages and safety details are given in detail.

The Contract Labour Regulation and Abolition Act

The Contract Labour Regulation and Abolition Act is another Act. If one employs less than 20 contract workers, there is no need for registration, but compliance with all regulations is necessary. If there are more than 20 workers, registration under this act is required.

Regards,
R J Rammohan

The answer depends on whether you are based in San Jose, California (as your note on the top right indicates), the United Kingdom (UK) (as your second note says), or Uttaranchal, where Haridwar is situated.

If you are in India anywhere, the factory comes under the Factories Act, and the office comes under the Shops & Establishments Act.

Regards,
R. Ramamurthy

Understanding Labor Licensing Under the Factory Act

The Factory Act has its own built-in system. In the case of the Contract Labour (Regulation and Abolition) Act 1970, you have to obtain a Labour License as the Principal Employer if you intend to avail the services of a contractor and their labor if the workforce is 20 or more. With the recommendation of the Principal Employer, the Labour Contractor also has to obtain a license from the Labor Authorities.

Thank you for your understanding.

Thank you for your valuable reply. My basic question was, "If we engage only direct labor in the factory without using any agencies, is it binding/necessary/mandatory to inform the government labor department?" If it is necessary, what will be the procedure for it?

Thanks with regards,
Ramesh Lawande

I do not know how it is in the USA, from where you seem to be writing, but in India, if the 'labour' are regular employees, they come under the Factories Act. If they are 'Casual Labour' (not permanent), you have to follow the Contract Labour Regulation and Abolition Rules irrespective of whether you engage a Labour contractor or not for the purpose.

Regards,
R. Ramamurthy

Procedure for Engaging Contractor Labor Under the Factory Act

As per the Factory Act, if the principal employer wants to engage contractor labor, the principal employer must first obtain contractor registration from the Labor Department. The question arises: how can this be done?

Steps to Obtain Contractor Registration

The procedure involves:
- Drafting a letter to the Labor Department for intimation and record.
- Making a challan (which can be obtained from the Labor Department and submitted at an SBI branch).
- Providing a list of contractors.

Once these steps are completed, they should be submitted to the Labor Department. Upon receiving the license from the Labor Department, the principal employer can proceed to make an agreement with the contractor, issue Form-5, and then the contractor can make a challan. A letter should be drafted and submitted to the Labor Department, following which the Labor Department will issue the license to the contractor for the specific company.

This is the procedure to deploy a contractor in a factory.

Regards

If you are appointing employees directly and your company is registered under the Factories Act, there is no need to separately register with the Labour Department. However, it is essential to maintain all the registers as prescribed by the Acts, such as the Attendance Register, Wage Register, Leave Register, Bonus Register, etc. These registers will be verified by officials from the Labour Department under the Minimum Wages Act and other relevant legislation.

If you intend to engage contract labor, you must obtain a Principal Employer License. You can then engage Contractors, who are required to have a Contract Labor License. It is crucial to ensure compliance with the provisions of the aforementioned Acts.

Regards,
Vara Prasad AVGN

Dear Prasad Ji, is this fact applicable throughout India? Is it true that separate registration for contract labor is not required if a factory is registered under the Factory Act? Kindly clarify.

If you are not engaging contract labor in your factory, there is no need to register with the Labor Department under the Contract Labor Act as the Principal Employer. Your Factory License reflects the strength of your employment.

Regards,
AVGN Vara Prasad.

Dear Ramesh,

We are seeing your information displayed at the top right corner: LAWANDE RAMESH is online now, a following member, a contributing member since November 2011, located in the United States, San Jose.

Subject: Re: Factory Registration Under Govt. Labour Dept.

Attribution: https://www.citehr.com/465935-factor...#ixzz2ZHcsmgcN

Regards,
Ramesh Lawande

Everybody has given guidance according to their wisdom. Now, let me also try to clarify your doubts:

1. As you have subsequently mentioned that you have registered your factory under the FA while at Nasik, which has now moved to Daman, in my opinion, you need a fresh registration from the Chief Inspector of Factories at Daman. You have to give closure intimation to the present labor authorities at Nasik. There are many obligations under different labor laws in the case of the closure of a factory, which you need to keep in mind.

2. If your factory is registered under the FA Act, you have to grant annual leaves as per Section 79 of the FA. There is no need to follow the Shop & Establishment Act.

3. If you are not employing contract labor, there is no obligation to inform the labor department.

4. As an Occupier, you have to maintain many registers concerning your factory as well as in respect of the workers you have employed, for which you can refer to the Rules framed under.

Regards