# Contract Labour Registration & Licence

> Under the OSH Code, establishments engaging 50 or more contract workers through contractors must register as principal employers, and contractors employing 50 or more workers need a licence. The principal employer is responsible for ensuring contract workers receive wages and welfare facilities if the contractor fails. Engaging contract labour in core activities is restricted, with specified exceptions.

Practice: Labour Law & HR Compliance — https://www.industax.com/services/labour-hr/

Facility management, security, housekeeping and manpower agencies need contractor licences; their clients need principal-employer registration. Both need wage records and payment through banking channels.

We register and license both sides, set up contractor compliance checks (PF, ESIC, wage payment) for principal employers, and handle renewals.

## Key facts

| Item | Detail |
| --- | --- |
| Threshold | 50 or more contract workers |
| Principal employer | Registration required |
| Contractor | Licence required |
| Core activities | Contract labour restricted, with exceptions |
| Liability | Principal employer ensures wages and welfare |

## Who needs this

- Companies using outsourced manpower
- Manpower and facility management agencies
- Construction and manufacturing firms

## What's included

- Registration and licence applications
- Contractor compliance audits
- Records and returns

## Documents

- Contract with the contractor
- Worker lists and wage records
- Entity documents

## Process

1. **Register** — Principal employer registered.
2. **License** — Contractors licensed.
3. **Monitor** — Monthly compliance checks.

## FAQs

### Is the principal employer liable for the contractor's PF?

Yes. If the contractor doesn't pay PF or ESIC for contract workers, the principal employer can be made to pay and recover it from the contractor.

### Can contract workers be used for core activities?

The OSH Code restricts it, with exceptions — for example where the activity is normally done through contractors, isn't full-time, or there is a sudden increase in work.

### Does a single licence cover all states?

The code allows a single licence for contractors operating in more than one state, issued by the central authority, in addition to state-level licences.

## Official sources

- Ministry of Labour & Employment — Labour Codes: https://labour.gov.in/

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Canonical page: https://www.industax.com/services/labour-hr/contract-labour-licence
Publisher: Indus Tax — CA-led tax and compliance firm (https://www.industax.com). Contact: info@industax.com, 9059139258.
This is general information, not advice for your specific facts.