Labor License Dilemma: Do You Need One for Each Contract with 20+ Workers Under CLRA?

Labor License Requirement Under CLRA

Whether a labor license is required for each contract employing 20 or more workers or for a contractor employing more than 20 workers through various contracts in the same establishment under CLRA?

Thank you for your inquiry. It is essential to determine the specific requirements regarding labor licenses for contracts involving a significant number of workers. If you need further clarification or assistance, please feel free to reach out.

Dear friend,

Though the CLRA Act, 1970 comes into play when there is a contract for service accomplished through the engagement of contract labor between the principal employer and the contractor, regardless of the place of work of the establishment of the former, the emphasis is always on the criteria for applicability. This includes the number of contract laborers in the establishment of the principal employer as well as the contractor, which stands at a minimum of 20 in both cases. It would automatically imply that the principal employer is bound to register himself under section 7 when the total number of contract laborers is 20 or above, regardless of the number of contractors. The contractor is also bound to obtain a license under section 12 when engaging 20 or more contract laborers for any specific contract work.

In other words, the registration of the principal employer and the licensing of the contractor are both specific to the work being carried out and the number of individuals involved. I would recommend reviewing sections 1 (4) (b), 7, and 12 of the CLRA Act, 1970.

Thank you.

If contract labor is engaged in the state of Haryana, and the appropriate government is also Haryana, then RC and Labor License are required under the CLRA Act if the employment of contract labor is fifty or more.

R N KHOLA

License Requirements Under CLRA

A license is contractor-specific, and therefore, all those who are deploying 20 or more persons in your establishment should obtain a separate license under the CLRA. For that, you will have to issue a separate Form VI to each contractor to enable them to take the license.

Contract Labor License Requirements

The basis for a contract labor license depends on state rules. At the same time, for PE, it is the total number of contract workers in the organization. It differs in the case of a license to a contractor depending on his number.

Basically, the underlying principle of activities is as stated by Sri Umakantanji.

Labor License Requirements for Multiple Work Orders

A contractor is awarded multiple work orders by the Principal Employer to execute work. Then the contractor has to obtain a separate license for each work order if the engagement of labor is equal to or exceeds the limit prescribed by the appropriate government. In such cases, the Principal Employer will have to issue a separate Form VI for each work order to the contractor to enable them to obtain the license.

Is a labor license required in the case of two different projects (different work orders) at the same location with the same principal employer having less than 20 manpower, i.e., 17-18 in each project? Please advise.

If the total number of contract workers engaged through all the contractors combined is 20 or more, then registration under the CLRA Act is mandatory for the principal employer. Simultaneously, a license is required for the contractor who employs 20 or more workers. Therefore, if one contractor is only engaging 19 workers, they do not need to obtain a license.

Labor License Requirements Under the Contract Labour (Regulation and Abolition) Act, 1970

Under the Contract Labour (Regulation and Abolition) Act, 1970 (CLRA), a labor license is mandatory for contracts employing 20 or more workers, regardless of whether the contractor employs more than 20 workers through multiple contracts in the same establishment.

The Act defines a "contract labourer" as someone employed by or through a contractor to perform work typically done by the establishment's employees. A contractor cannot employ contract labor in any establishment without obtaining a license from the appropriate government.

The application for a license must be submitted in the prescribed form with the required fee. The appropriate government reviews the application and relevant factors before granting or refusing the license.

The license is valid for one year and can be renewed periodically, with a fee payable for renewal.

Conditions and Penalties Under the Act

The Act sets certain conditions for contractors employing contract labour, including maintaining a register of contract labourers, providing them with the same facilities as regular employees, and ensuring they are not subjected to unfair labor practices.

Penalties, such as imprisonment and fines, are specified for contravening the Act's provisions.

In summary, the CLRA requires a labor license for each contract employing 20 or more workers. The contractor must pay a fee and adhere to the Act's conditions.

Dear S Acharya,

Labor license is not required because the workmen engagement in each work order is less than twenty. The location may be the same, but there are two different work orders. The requisite document to obtain the license is the work orders. No CL (R&A) license is required since the workforce is less than twenty. Hopefully, you understand.