Navigating the Contract Labour Act: When Is Company Registration Required for Contractors?

Hi,

When do we need to take company RC under the Contract Labour Act? Here, there are two cases:

1. Five different contractors but having 10-12 workmen each.
2. All contractors are far below 20, but the total contractual workmen headcount is much beyond that.

Another query is whether the RC taken for these contractors is temporary or permanent. Kindly explain in detail.

RC (Registration Certificate) is for the principal employer, and a license is for the contractor. You can apply the same in the Labour department of your jurisdiction.

Registration Certificate obtained by the Principal Employer is a permanent one. Only those contractors who deploy 20 or more workers need to take a license. However, it is always desirable that each contractor shall have a contract license. Normally, in order to meet this requirement, the number of workers deployed may be put as 20.

Dear Sandeep,

Registration of Principal Employer under CL(R&A) Act

The registration of a Principal Employer under the CL(R&A) Act is not determined by the number of workmen but by the engagement of workmen through a contractor who is not an employee of the company. For a better understanding, please refer to Section 7 of the CL(R&A) Act, 1970.

In the absence of registration by the Principal Employer, the engagement of any number of workmen for any period through a contractor shall be treated as employees of the Principal Employer.

Therefore, take registration immediately to avoid any disputes. Also, ask the contractor to obtain a CL license for compliance.

Thank you.