Contract Labour Licensce & Act
The practice of employing contract labour through contractors and other agencies is prevalent across nations and industries in different occupations including skilled, semi-skilled and unskilled work. Today it has become a global phenomenon, and looking into the market driven economy, organisations has to hire short term or temporary skilled or unskilled manpower to address occasional upsurge in demand. Employer have to guard and check against double fraud by the contractor at the cost of the poor contract workers and also ensure that the prescribed social security and other benefits are extended to the contract worker. In case of non-compliance employer will be held responsible for the benefits payable to contract labour.
Our Services! What We Do.
- Registration and Amendment of Certificate under Contract Labour Act
- Issuance of Labour License under Contract Labour Act.
- Registration and amendment of Certificate under BOCW Act
- Maintenance Separately Compliance records of every Contractors required under ESI & EPF Inspection in statutory format.
- Periodical preparation & submission of all statutory registers & returns as per statutory periodicity.
- Liaising with Government Authorities during or after inspections / visits or otherwise
- Support in drafting responses to Government Notices & Observations
- Web – based Module to track Monthly contractor Compliances for PAN India Locations
- Carry Monthly Bill Verification Process for all Labour Law Compliances applicable to the contractor and required at the time of inspections.
Advantage with Right Grid
- In house developed Software to meet your particular requirements.
- Single Point of Contact for all Contractor Compliances.
- Good Liaison with the Government Departments
- Experience of handling green field project.
- Advisory services on wage structuring as per Central/State Laws.
- Expertise in handling large volume data & multi locations across the country.
Contract Labour Act
The Objective of the Legislation is: Working conditions of the contract labour should be regulated so as to ensure the payment of wages and provision of essential amenities.
Before we proceed further, let us understand that the CLRA Act is applicable to:
- To every establishment where 20 or more (this is different in few States) workmen are employed on any day of the preceding 12 months
- To every contractor, who employed on any day of the preceding 12 months 20 or more workmen (this is different in few States)
The Act is not applicable where a work is casual or intermittent nature is performed, for not more than 120 days in the preceding 12 months. Notwithstanding, the Appropriate Government can apply provisions of the Act to any establishment irrespective of number or workmen employed, after giving 2 months’ notice.
Most of the establishments do recognize that the Security, Housekeeping, Maintenance, Gardening, Pantry personnel as the contractors and comply with the provisions of the CLRA Act. Days have gone that establishments are engaging contractor labourers, only in such areas.
Where, the establishments are engaging manpower resources through third party vendors for such non-core jobs, the current trend in the Industry is to outsource processes where Skilled Manpower, is also required, in the areas where they require a support in their day-to-day executions/implementation of processes.
Nowadays establishments are running businesses as Project based model. As many technicians, analysts, engineers, implementation personnel, etc, in the name of consultancy were outsourced in almost all companies.
These jobs are basically outsourced to another establishment, through a Contractual agreement for certain period, usually till the completion of the project/assignment. These type of contracts may be usually project based and the compensation is for the project and not for the manpower engaged.
As the manpower is engaged in such projects, they will also be considered of Contractual Labour and to comply with the provisions of Contract Labour Regulation Act.
As an exception, if in such project, if such contractors supplied only goods or articles of manufacture to establishment through contract labour, then he is not a contractor.
Hence, there are two types of compliances, an establishment, need to mandatory follow:
1. If applicable where you as an Establishment is engaging third party Vendors (Your Establishment is a Principal Employer), then you need to Comply by
- Obtaining Registration Certificate, including the details of all those third party vendors, who supply manpower who will be engaged in their establishment.
- Maintain Principal Employer register and file Annual return
- Issuance of Form V, if the Contractor is eligible to apply for License
- Submission of Commencement and Completion of contract work
- Ensure compliance by CLRA Act, Allied Acts and Social security Acts, etc
2. If applicable, where your employees are engaged in other establishments (Your Establishment is considered as an Immediate Employer) as Technicians, Consultants, Engineers, Analysts, Implementation of process/projects, then you need to comply by
- Obtaining License
- Maintain appropriate Statutory Registers under CLRA Act and Allied Act
- File periodical Statutory Returns
- Submission of Commencement and Completion of contract work
- Ensure payment of Minimum Wages, appropriate deduction and remittance under Social Security benefit Act
- An application for employment by the contract employee
- Letter of appointment by the contractor