Contract Labour Licence in Karnataka: Who Needs It?

If you use contract workers — through a manpower supplier, facility partner or job-work contractor — the Contract Labour (Regulation and Abolition) Act, 1970 may apply to you. It creates obligations for both the principal employer and the contractor.

Who is covered

The Act generally applies to establishments and contractors that employ a prescribed number of contract workers (commonly 20 or more). Thresholds and procedural rules are set by central and state notifications, so confirm the current position for your case.

Two separate registrations

• Principal employer: registers the establishment with the licensing authority and receives a registration certificate.
• Contractor: obtains a licence for the specific work, number of workers and period.

A common mistake is assuming the contractor's licence alone discharges your duties. As the principal employer, you carry responsibility for ensuring wages are paid and facilities are provided if the contractor defaults.

Duties that follow

• Pay at least minimum wages and ensure timely payment, preferably through bank transfer.
• Provide canteens, rest rooms, drinking water and toilets where required.
• Maintain registers of contractors, workers and wages.
• Display notices and abstracts of the Act.
• Ensure PF and ESI coverage for contract workers.

How to apply

1. Gather incorporation documents, work order or agreement and worker numbers.
2. Apply on the labour department portal for registration or licence.
3. Pay the prescribed fees and security deposit where applicable.
4. Display the certificate and keep it updated on renewal.

How to choose a compliant contractor

Ask for the licence, PF and ESI challans, wage registers and a compliance undertaking before onboarding any manpower provider. Audit these quarterly.

HR Global Reach operates as a compliant employer of record for the workforce we deploy and can support you with registrations and documentation.