CONTRACT LABOUR COMPLIANCE SERVICES

It is essential for employers to ensure compliance with statutory labour laws regarding contract labour, as any non-compliance may lead to serious consequences for the organisation.

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Introduction of Contract Labour Compliance:

Compliance with the Contract Labour Act is crucial to avoid legal consequences. The Act, established in 1971, sets specific guidelines for its enforcement. Two main categories need to be taken into account:

(A) Establishments with 20 or More Workmen:

This category includes establishments where 20 or more workmen are employed, or were employed at any point in the previous 12 months, as contract labour.

(B) Contractors with 20 or More Workmen:

This category pertains to contractors who employ, or have employed at any point in the previous 12 months, 20 or more workmen.

Note: The Contract labour Act does not cover establishments where work is intermittent or casual. Work is considered intermittent if it is carried out for less than 120 days in the previous 12 months, or if it is non-seasonal and performed for less than 60 days in a year.

Contract Labour Compliance Requirements:

To avoid penalties, principal employers and contractors must ensure the following:

Employment Conditions

Ensure that contract labour is provided with fair wages, suitable working conditions, and statutory benefits like Provident Fund, ESI, etc.

Registration and Licensing

Obtain necessary registrations and licences for employing contract labour as per contract labour act.

Records and Returns

Maintain proper records and submit required returns and information as stipulated under the contract act.

Welfare and Health

Provide for canteens, restrooms, washing, first-aid facilities, and other amenities for the contract labour as required by labour laws act.

Comprehensive Contract Labour Compliances Services:

Our services for Contract Labour Compliance are intended to benefit the principal employer, contract workers, and contractors, as well as any other stakeholders in the employment ecosystem.  Our primary goal is to guarantee that your company stays current with changing regulations and compliant with intricate details. The goal of these services is to offer complete compliance solutions for the contract labour needs of your company. We offer a comprehensive range of services to ensure compliance with contract labour laws, including:

Registration under the CLRA Act

We assist in the seamless registration of the principal employer under the Contract Labour (Regulation & Abolition) Act, ensuring adherence to all statutory requirements.

Licensing Guidance for Contractors

We provide expert guidance to contractors in obtaining the necessary licenses under the CLRA Act, simplifying the compliance process.

Comprehensive Compliance Setup

We handle and ensure compliance with various acts such as the Factories Act, The Shops and Commercial Establishment Act (for Service Industry), and Professional Tax Act to establish your organization properly.

Maintenance of Registers, Records, and Returns

We maintain contractor-wise registers, records, and returns, reducing the administrative burden on your organization.

Coordination of Benefits

We make it easier to coordinate the Contract Labour Acts’ EPF, ESI, LWF (Labour Welfare Fund), and WC (Workmen’s Compensation) benefits so that your company can get the most out of them.

Handling Sensitive Issues

We administer sensitive issues within the organization, including compliance with the Sexual Harassment Act and Industrial Dispute Act.

Minimum Wage Payment Compliance

We ensure adherence to the Minimum Wages Act by implementing effective processes for calculating and paying minimum wages to the contract workforce.

EPF and ESI Contributions Management

We efficiently handle EPF and ESI contributions through the employer’s sub code or contractor’s code, ensuring compliance with relevant regulations.

Why Choose Sankhla Consultants for Contract Labour Compliances?

When it comes to contract labour compliances, the primary employer bears the majority of the responsibility. Failure to fulfil these obligations correctly could have dire repercussions for the organization. Sankhla Consultants is a specialised company that provides comprehensive services in contract labour compliances.

  • One of the primary responsibilities is to ensure that a valid certificate is obtained under the Contract Labour (Regulation & Abolition) Act, 1970. This involves following the necessary procedures and regulations to ensure compliance with the act.
  • Another important responsibility is to register the organisation under the PF and ESI acts to ensure proper compliance with these acts. This includes fulfilling the necessary requirements and making timely payments towards these schemes.
  • It is crucial to ensure the timely payment of minimum wages, bonus, leave wages, gratuity, and other benefits to the contract labourers. This involves maintaining accurate records and adhering to the provisions of the Minimum Wages/ Payment of Wages acts.
  • Thorough maintenance of records and registers under the relevant acts, such as the Minimum Wages/ Payment of Wages acts, is essential. This includes keeping track of various details related to the contract labourers’ employment and wages.
  • Providing accident, retirement/terminal, and maternity benefits to the contract labourers is also a responsibility. This involves understanding and implementing the provisions of the relevant acts, such as the BOCW, ESMA (or ISMA), and other applicable labour laws.
  • Strict compliance with the BOCW, ESMA (or ISMA), and various other relevant acts is necessary. This includes staying updated with any changes in the laws and ensuring that the organisation follows all the required regulations to protect the rights and welfare of the contract labourers.

Labour License Consultant Near Your Location – Serving Across India

Are you in search of a dependable consultant for your labour licensing needs in your area? Look no further! 

The Contract Labour (Regulation and Abolition) Act, 1970, is a key piece of legislation in India that regulates the employment of contract labour in certain establishments and aims to provide better working conditions. Ensuring compliance with this Act requires adherence to several provisions and regulations.

ESIC form
  • SANKHLA CORPORATE SERVICES (P) LTD – We specialise in providing services to employers and contractors who need to obtain various registrations and licences under labour laws. Our comprehensive range of services includes initial registrations, licences under the Contract Act (CLRA), BOCW, PF, ESIC, and more. Connect with us for a one-stop solution for all your labour and worker-related licences.
  • Our skilled team of consultants is available to assist you. We are dedicated to giving businesses of all sizes outstanding service, and we are well-represented throughout India. Our staff is available to assist you with any work permit-related concerns, compliance, or paperwork. 
  • You can count on us to guide you through the complexities of labour and legal laws and make sure your company complies with all applicable regulations. For professional advice and assistance, get in touch with us right away. 

Contract Labour Compliance Requirements under Contract Labour Act:

To ensure compliance with the Contract Labour (Regulation & Abolition) Act, 1971, various measures are required:

  • Contractors must submit Half-Yearly Returns by 30th July for Jan-June and 30th January for July-Dec in Form No. XXIV.
  • Principal Employers are required to submit the Annual Return for January through December to the Registering Officer by February 15th, using Form No. XXV.
  • Principal Employers must give the Inspector a return in Form No. VI-B within 15 days of the beginning or end of a contract.
  • The Ease of Compliance Rules require the Common Registers listed in Forms A, B, C, and D to be kept up to date, either electronically or manually. This replaces some forms that were required under the CLRA Act.
  • The Act & Rule’s Abstract and other pertinent information must be displayed conspicuously by Principal Employers. 
  • Principal Employers are responsible for maintaining a register of contractors in Form No. XII. Also responsible for making sure Contract Labour receives the minimum wage. 
  • Employees must have access to facilities like a canteen, restroom, drinking water, latrines, washing machines, urinals, and first aid kits.
  • While contractors are required to obtain or renew their licence, principal employers are required to make sure that their establishment is registered.

Contract Labour Act Compliance Checklist-

This checklist helps principal employers and contractors comply with the law by offering an organized method of compliance. Monitoring and audits on a regular basis can support compliance maintenance and timely resolution of any problems. 

Below is a comprehensive compliance checklist for the Contract Labour Act:

All businesses that have a workforce of 20 or more employees or have engaged in contracts within the previous 12 months. All contractors who have a workforce of 20 or more employees at present or have had such a workforce in the past 12 months.

Submit Form I (Registration Application) to register the primary employer of the household with the appropriate governing body. Ensure to keep an up-to-date registration certificate.

Contractor Licensing:

  • Contractors must obtain a licence for employing contract labour by submitting Form IV (Application for Licence).
  • Maintain a valid Licence to engage contract labour.

Registers by Principal Employer:

  • Form XIII: Register of Contractors.
  • Form XII: Register of Contract Labour employed by the contractor.
  • Form XX: Muster Roll.
  • Form XXI: Register of Wages.

Registers by Contractors:

  • Form XVII: Register of Wages.
  • Form XVIII: Register of Wages-cum-Muster Roll.
  • Form XIX: Record of Deductions for Losses or Damages.
  • Form XX: Register of Fines.
  • Form XXI: Register of Advances.
  • Form XXII: Register of Overtime.

Welfare Measures:

  • Ensure provision of canteens, restrooms, and washing facilities where contract labour is employed in large numbers.
  • Provide first-aid facilities.

Health and Safety: Ensure compliance with safety standards and provisions for the health of contract labourers.

Timely Payment:

  • Ensure that wages are paid on time, before the expiry of the wage period.
  • Payment should be made directly to workers or their authorized representatives.
  • Minimum Wages: Ensure that wages are not less than the minimum wage prescribed by the applicable laws.
  • Work Hours and Overtime: Ensure that working hours and overtime comply with the provisions of the contract Act and applicable labour laws.
  • Holidays and Leave: Ensure contract labourers are provided with holidays and leave as per applicable norms.

Display of Notices: Display notices containing particulars about the principal employer, contractor, hours of work, wages, and wage periods in a conspicuous place.

Submission of Returns:

  • Form VI-A: Notice of commencement or completion of contract work.
  • Form XXIV: Annual Return to be submitted by February 15 of every year.

Dispute Resolution: Establish mechanisms for addressing grievances and resolving disputes related to contract labour.

  • Internal Audits: Conduct regular internal audits to ensure compliance with all provisions of the contract Act.
  • Inspections: Cooperate with inspections conducted by the authorities and ensure all records and registers are up-to-date and available for review.

Record Maintenance: Maintain all records and registers for a period of three years from the date of last entry.

Figure: Factories act in labour laws

Penalty for non-compliance of contract labour act: 

The Contract Labour (Regulation and Abolition) Act, 1970, is a key piece of legislation in India aimed at regulating the employment of contract labour and ensuring fair treatment and working conditions. Non-compliance with this Act can lead to several penalties, which are outlined as follows:

Contract labour non compliance penalty
  • General Penalty for Contravention (Section 23): Any employer or principal employer who contravenes the provisions of this Act or any of the rules made thereunder shall be punished with imprisonment for a term which may extend to three months or with fine which may extend to one thousand or two rupees.
  • Obstruction (Section 24): Any person who interferes with an investigator in the performance of his duties under the Act or who refuses or neglects to provide adequate facilities for the trial, examination, inquiry or investigation or authorised by this Act in relation to any premises , shall be sentenced to imprisonment for a term not exceeding three months or to a fine not exceeding 500 or to a fine not exceeding Rs.
  • False Statements (Section 25): If any person required to furnish any information or return under the Act or the rules wilfully makes a false statement or refuses to furnish the information or return, they are punishable with imprisonment for a term which may extend to three months, or with a fine which may extend to ₹1,000, or with both.

Our Services:

Sankhla Consultants offers contract structuring services that benefit all parties, including principal employers, contract workers and contractors. Our primary focus is on guaranteeing that your organisation complies with various intricate details and stays current with regulations.

  • We can also provide guidance to contractors on obtaining the necessary licensing under the CLRA Act. 
  • The CLRA Act requires the registration of the principal employer, and we can assist you with this process.
  • Our team is well-versed in administering sensitive issues within the organisation, following the guidelines set by the Sexual-Harassment and Industrial Dispute Acts. 
  • We maintain the registers, records, and returns for contractors, making sure that all required paperwork is in order.
  • We also handle EPF, ESI, LWF, and WC for CL acts, Also coordinating the benefits under these acts for your organisation.
  • This ensures that your organisation is properly set up. 
  • We ensure strict compliance with the Minimum Wages Act and facilitate efficient payment procedures for minimum wage obligations. 
  • We see to it that the Minimum Wages Act is strictly followed and that efficient procedures are used to make minimum wage payments.
  • Our team is experienced in handling and ensuring compliance with the Factories Act such as The Shops and Commercial Establishment Act (Service Industry only), the Professional Tax Act, Contract labour Act and other labour laws Act.

Are you in search of a labour License Consultant in your vicinity?

We offer services pertaining to CLRA – Contract labour Act. Obtain your Contractor License and Establishment Registration in accordance with the Contract labour Act.

  1. Registration of Establishment – CLC Registration (State and Central)
  2. License for Labour Contractor – CLRA License (State and Central)

In accordance with the Contract Labour (Regulation and Abolition) Act of 1970, it is compulsory for both the Establishment (Principal Employer) and the Contractor to obtain a Labour License Registration under the following circumstances:

  1. If, at any time in the past year, the Principal Employer engaged 20 or more workers as contract labourers.
  2. If the Contractor (Labour Supplier/Contractor) has employed twenty or more workmen on any day within the last 12 months.
  3. It is important to note that certain states have raised the limit to 50 workmen.

Two Types of Contract Labour License in India

  1. Registration for Establishment or Principal Employer under the Contract Labour Regulation and Abolition Act (CLRA) is limited to 20 workers as per the central regulations. 
  2. The Contractor License under the Contract Labour (Regulation and Abolition) Act (CLC) allows for a maximum of 20 workers as per central regulations.

What Documents Do Consultants Need in Order to Get a Labour License?

The documents required for the CLC and license application in India are as follows.

  • The PAN Card belonging to the owner is required for verification purposes.
  • The Aadhar Card of the owner is necessary to establish their identity.
  • The GST Registration Certificate is required for businesses registered under the Goods and Services Tax.
  • Contact details including the owner’s mobile number and email address are needed for communication purposes.
  • The PF (Provident Fund) Registration Certificate is necessary for employers to ensure compliance with provident fund regulations.
  • To verify the address, either an Electricity Bill or Utility Bill of the premises (or Rent Agreement if the premises are rented) can be submitted as proof.
  • Either an ESIC (Employee State Insurance Corporation) or WC (Workmen’s Compensation) Policy is required to provide insurance coverage for employees.
  • For Partnership Firms, LLPs, Trusts, or Companies, the respective legal documents, Company PAN (and MoA – AoA), and Registration Certificate are necessary to establish the legal structure and registration status of the entity.
best Factory

If the contractor submits two additional documents with the application, they should be as follows-

  1. The Contractor Application requires a copy of the Contract Agreement, Letter of Intent, or Letter of Commitment between the Principal Employer and the Contractor.
  2. The Contractor Application requires the Principal Employer’s Form III (also known as Form 3), or Form V if applicable.

Table of contract bare act:

ChapterSectionDescription
Chapter I: Preliminary1Short title, extent, commencement, and application
2Definitions
Chapter II: The Advisory Boards3Central Advisory Board
4State Advisory Board
5Power to constitute committees
Chapter III: Registration of Establishments Employing Contract Labour6Registration of certain establishments
7Revocation of registration in certain cases
8Effect of non-registration
9Prohibition of employment of contract labour
Chapter IV: Licensing of Contractors10Prohibition of employment of contract labour (power of the government)
11Appointment of licensing officers
12Licensing of contractors
13Grant of licenses
14Revocation, suspension, and amendment of licenses
15Appeal
Chapter V: Welfare and Well-Being of Contract Workers16Canteens
17Restrooms
18Other facilities
19First-aid facilities
20Liability of principal employer in certain cases
Chapter VI: Penalties and Procedure21Inspecting staff
22Facilities to be afforded to inspectors
23Violation of the rules governing the use of contract labor
24Other offenses
25Offenses by companies
26Cognizance of offenses
Chapter VII: Miscellaneous27Protection of action taken under this Act
28Power to make rules
29Power to exempt in special cases
30Protection of rights under other laws
31Power to remove difficulties