Do I Need a Labor License for Separate Contracts with the Same Employer? Seeking Advice on Housekeeping and Security Staff Deployment

Greetings all,

Labour License Requirement for Multiple Contracts

My query is about deploying 12 housekeeping staff and 10 security guards in a company. The principal employer is the same, but the agreements/tenders for security guards and housekeeping are separate. Do I need to obtain a labor license?

The contracts are separate, but the principal employer is the same. According to the rules, a license is required after 20 workers. However, is it necessary in separate tenders where one has 10 and the other has 12? From the tender's perspective, there is no need for a license as each has fewer than 20 workers. But from the principal employer's perspective, the total is 22 (12+10), which suggests a license is needed. Please advise on what should be done. If a license is required, why? If not, why not?

Hello,

Based on your query, I understand that you are engaging 12 housekeeping staff and 10 security guards in one company but with separate contracts. Your question is about whether you need to obtain a labor license since the total number of employees exceeds 20, even though they are on separate contracts.

In India, as per the Contract Labour (Regulation and Abolition) Act, 1970, a contractor who employs 20 or more workmen on any day of the preceding 12 months is required to take a labor license. The Act does not differentiate between separate contracts with the same principal employer. Hence, in your case:

1. 💵 Calculate the total number of employees: In your case, you have 12 housekeeping staff and 10 security guards which totals to 22 employees.

2. 🕰 Check if it exceeds the limit: As the total number of employees exceeds 20, this falls under the purview of the Contract Labour Act.

3. 📭 Apply for a labor license: Therefore, you will be required to obtain a labor license.

4. ⚠️ Consider the consequences of non-compliance: Failure to obtain a labor license can lead to penalties and legal complications.

The reason behind this is to ensure fair labor practices and compliance with labor laws, irrespective of the division of contracts. The Act aims to protect the rights of contract labor, and the license is a measure to regulate these practices.

Here are the steps to apply for a labor license:

1. 📅 Visit the official website of the Department of Labor of your state.
2. 📅 Find and click on the 'Apply for Labor License' section.
3. 📅 Fill in all the required details accurately.
4. 📅 Attach the necessary documents, such as the contract agreement, PAN, Aadhar, etc.
5. 📅 Pay the prescribed fees.
6. 📅 Submit the application.
7. 📅 Once the application is processed and approved, you will receive your labor license.

Remember, the goal is to ensure the well-being of your employees and maintain compliance with labor laws. So, it's always better to be on the safe side by obtaining the necessary licenses.

Hope this clarifies your query and helps you in taking the right steps.

😊 Happy to help!