Labor License Dilemma: Do Contractors Need a License for Over 20 Workers Across Sites?

Labor License Requirement for Contractors

If any contractor is providing services of labor supply to different organizations at various locations within the same state, and the number of laborers is below 9 at each location, but the total number of laborers altogether exceeds 20 when adding all supplied labor to different organizations by a single contractor, then should this contractor have a labor license or not?

Regards

As per the rules: No, but if he wishes to remain in business: Yes. Nowadays, many employers seek prior licenses.

Applicability of the CL (R&A) Act

The CL (R&A) Act applies to every establishment in which 20 or more workmen are employed or were employed on any day of the preceding 12 months as contract labor. It also applies to every contractor who employs or employed 20 or more workmen on any day of the preceding 12 months. We need to assess whether the establishments to whom you are providing labor supply services employ 20 or more contract laborers, which includes yours plus other contractors. In that case, the Principal Employer (PE) of that establishment shall have to take registration from the Registration Officer of the area.

Since you are presently supplying contract labor, with the number below 9 at each location, you need not take licenses from the licensing officer. However, be mindful that if any day your numbers become 20 or more in any of the establishments you are dealing with, you shall have to obtain a license.

Regards,
BS Kalsi
Member since Aug 2011

Contractor Licensing Requirements

No. If the contractor has more than 20 workers employed by him, he shall take a license regardless of whether he is supplying less than 20 workers to each PE. The PE does not need to register if the total number of workers engaged through all his contractors is less than 20.

Regards, Varghese Mathew

As per the section you have quoted, it applies to a contractor who has more than 20 workmen, not 20 at any single location. So the contractor is very much covered by the act. The requirement of a license depends on the state rules, so the state rules may provide for a license only if he has more than 20 in each location. According to me, it seems that he should take a license as he has more than 20 workmen.

I am sorry to contradict your point. You mentioned that "if the contractor is employing more than 20 workmen, he shall take a license irrespective of the fact that he is supplying less than 20 workers to each Principal Employer (PE). The PE need not take registration if the total number of his workmen engaged through all his contractors is less than 20." My understanding is that if a contractor is deploying 9-10 workmen in different establishments, even though the total number comes to more than 20, he need not take a license.

Query Regarding Form V and Registration Certificate

Now, my query is: if the Principal Employer has not obtained the registration certificate from the Registering Officer of the area, can he still issue Form V to the contractor? If the contractor is supplying 9-10 workmen in different establishments, from which PEs should he obtain Form V to enable him to obtain the license? Should he collect a bunch of Form V from all the PEs for whom he is supplying the contract labor before applying for the license?

I would request my seniors as well to help me in clearing my doubts.

Regards,
BS Kalsi
Member since Aug 2011