Labour Licenses

Overview

The Contract Labour (Regulation and Abolition) Act, established in 1970 by the Indian Legislature, aims to regulate the employment and conditions of contract labour. This Act primarily seeks to restrict the employment of contract labour in certain situations and ensure proper working conditions for contract labourers when employed.

Applicability of the Act

1) Entities Covered: Applies to establishments employing 50 or more workers as contract labour on any day of the accounting year, and to contractors employing a similar number of workers.

2) Exclusions: Does not apply to intermittent, seasonal work, establishments in special economic zones, or those where work does not exceed 120 days annually.

Key Provisions

1) Contractor Definition: Defined under Section 2, a contractor is responsible for delivering specified results (excluding goods or services manufactured) using contract labour.

2) Advisory Boards: Establishment of Central and State Advisory Boards to oversee and advise on the administration of the Act.

Registration of Establishments

Requirement: Mandatory for establishments planning to employ contract labour.

Process: Employers must apply using Form I and submit the necessary fees for registration, after which a certificate in Form II is issued.

Licensing of Contractors

Requirement: Necessary for contractors employing 50 or more workers.

Procedure: Contractors must apply for a license using Form IV, deposit a security fee, and obtain a certification from the principal employer (Form V). Licenses are issued upon compliance and can be renewed.

Responsibilities

1) Employers: Must register the establishment, engage only licensed contractors, maintain proper records (Form XII), and ensure timely submission of annual and specific returns.

2) Contractors: Required to obtain a license, maintain payroll and labor welfare records, provide necessary facilities like canteens and restrooms, and ensure timely wage disbursement.

How to Obtain Registration and License

1) Principal Employer Registration:

 Application: Submit Form I with the necessary fee and supporting documents.

Fee Structure: Varies based on the number of workers, ranging from ?1000 for 50 workers to ?15000 for 401 or more workers.

Amendment: Requests for changes in the registration must include a valid reason and a fee adjustment if applicable.

2) Contractor Licensing:

Application: Complete Form IV, submit the necessary fee and a security deposit.

Fee Structure: Starts at 500 for 50 workers, up to 8000 for 401 or more workers.

Renewal and Amendment:

Applications for renewal and amendments should be submitted 30 days before license expiry or as needed.