Labour Contract License

Labour Contract License

A Labour Contract License is required under the Contract Labour (Regulation and Abolition) Act, 1970 for establishments that engage contract workers through a contractor. Both the principal employer (the company hiring through a contractor) and the contractor itself must register/obtain a license.

Who Needs It?

• Principal Employers: Establishments engaging 20 or more contract workers must register with the appropriate government authority.
• Contractors: Contractors employing 20 or more workers on behalf of any establishment must obtain a license.
• Applicable in factories, mines, plantations, construction sites, and commercial establishments.

Key Obligations Under the Act

• Contractor must ensure EPF and ESIC compliance for all contract workers.
• Contract workers are entitled to same wages, amenities, and welfare as regular workers.
• Welfare facilities — canteen, restrooms, first aid — must be provided at worksite.
• Muster rolls, wage registers, and attendance records must be maintained.
• License must be renewed annually.

Documents Required

• Certificate of Incorporation / Partnership Deed / GST Certificate.
• PAN Card of the establishment and contractor.
• List of contract workers with designation, wages, and nature of work.
• Details of principal employer / contract work undertaken.
• Bank details and security deposit proof (as per prescribed amount).
• Address proof of the business premises.

Registration/License Process

1. Principal employer applies for Registration Certificate with the Registering Officer (Form I).
2. Contractor applies for License with the Licensing Officer (Form IV) along with security deposit.
3. Submit all required documents and pay the prescribed fees.
4. Receive Registration Certificate (for principal employer) and License (for contractor).
5. Renew the contractor's license annually.

Timeline

15–30 working days.

Why Choose Tax Precision?

• Expert handling of both principal employer registration and contractor license.
• Security deposit calculation and documentation support.
• Ongoing compliance advisory — muster rolls, wage registers, welfare facilities.
• Annual license renewal management.
• Labour law audit support for contractor compliance verification.