Contract Labour License and Principal Employer Registration

The Contract Labour (Regulation and Abolition) Act, 1970 was subsumed in the OSH Code, 2020 from 21 November 2025. The contract labour provisions now apply where a contractor engages 50 or more contract workers, up from 20. A contractor working in more than one State can take a single licence instead of one per State, and the Code restricts contract labour in core activities, with some exceptions.

The principal employer registers the establishment and stays answerable for wages if the contractor does not pay. That is the exposure most companies underestimate. When a contractor walks away without clearing PF or wages, the bill lands with you. Registration itself is simple. Managing the contractor is where the real work lies.

Contractors apply with the work order, the principal employer registration certificate, details of the work, site, duration and maximum number of workers, their own PF and ESI codes, and the prescribed fee and deposit. We prepare and file the application, see it through, and handle amendments when the headcount or site changes.

We audit contractors on wages, PF and ESI deposits, registers, attendance and welfare facilities, and we draft contractor agreements with proper compliance and indemnity clauses. A quarterly audit costs far less than one inspection that goes badly, or one labour dispute where the contractor has already disappeared.

Questions clients usually ask

Does the old CLRA Act still apply?

No. It has been subsumed in the OSH Code, 2020 with effect from 21 November 2025.

What is the threshold for a contractor licence?

The contract labour provisions of the OSH Code apply to contractors engaging 50 or more contract workers.

Can one licence cover several States?

Yes. A contractor working across States can apply for a single licence under the OSH Code.

Who pays if the contractor defaults on wages?

The principal employer has to ensure payment and can recover it from the contractor.

Ready to get answers from a qualified compliance expert?

Submit your query below, and a qualified compliance expert will get in touch to guide you through your next steps.

Contract Labour License and Principal Employer Registration

What Changed in 2025

The Principal Employer

The Contractor Licence

Auditing Your Contractors

Questions clients usually ask

Does the old CLRA Act still apply?

What is the threshold for a contractor licence?

Can one licence cover several States?

Who pays if the contractor defaults on wages?

Ready to get answers from a qualified compliance expert?

For Consultation

Call: +91 76964-26220