Is It Applicable Under Contract Labour (Regulation And Abolition) Act, 1970

Dear HR Professionals,

We have applied for a license under the Contract Labour (Regulation And Abolition) Act, 1970, in the Government of Andhra Pradesh.

We are waiting to receive that license from the Government of Andhra Pradesh.

After the receipt of the license, shall we maintain the following records for below 20 workmen:

1. Form XIII Register of Workmen employed by the contractor Rule 75
2. Form XIV Employment Card Rule 76
3. Form XV Service Certificate Rule 77
4. Form XVI Muster Roll Rule 78(1)(a)(i)
5. Form XVII Register Of Wages Rule 78(1)(a)(i)
6. Form XVIII Register Of Wages cum Muster Roll Rule 78(1)(a)(i)
7. Form XIX Wage Slip Rule 78(1)(b)
8. Form XX Register of deductions for damage or loss Rule 78(1)(a)(ii)
9. Form XXI Register Of Fines Rule 78(1)(a)(ii)
10. Form XXII Register Of Advances Rule 78(1)(a)(ii)
11. Form XXIII Register Of Overtime Rule 78(1)(a)(iii)

However, in Form IV, the Maximum Number of contract labour proposed to be employed in the establishment on any date is 50 Nos.

The Contract Labour (Regulation And Abolition) Act, 1970 applies to:
(a) Every establishment in which twenty or more workmen are employed or were employed on any day of the preceding twelve months as contract labour;
(b) Every contractor who employs or who employed on any day of the preceding twelve months twenty or more workmen:
Provided that the appropriate Government may, after giving not less than two months' notice of its intention to do so, by notification in the Official Gazette, apply the provisions of this Act to any establishment or contractor employing such a number of workmen less than twenty as may be specified in the notification.

Please clarify.

Thanks with Regards,

Thirumurugan

Check your state's CLRA rules. They must have increased the limit for availing a license for engaging contract laborers in their state. As per the central act, it is common to obtain a license if it exceeds 20. By using the powers in the act, the state government will amend some revisions.

Last year, they increased the limit for obtaining a factory license from 10 with power to 20 with power and from 20 without power to 40 without power.

Likewise, you have to check your state's rules before proceeding to apply for any licenses.

Dear HR Professionals,

Still, we have not found the correct way to handle the subject of the Contract Labour Regulation and Abolition Act of 1970. Kindly address the following queries:

- Should we maintain records for fewer than twenty workmen under the CLRA Act?
- In Form IV, we have stated the maximum number of contract laborers to be employed in the establishment on any given date as 50, but currently, our contract labor strength is below twenty. Our appropriate Government authority is Andhra Pradesh.
- We are disbursing the employees' salaries through bank account deposits.
- How should we maintain the Form XVII Register of Wages as per Rule 78(1)(a)(i) and Form XIX Wage Slip as per Rule 78(1)(b)?

For your quick reference, we have attached the Contract Labour Andhra Pradesh Rules of 1971, the Contract Labour Central Rules, and the Contract Labour Regulation and Abolition Act of 1970.

Please provide clarification on the above matters.

Thanks with Regards,
Thirumurugan

If you have obtained Form IV for 50 employees from the Principal employer, your employment strength on any date may be 50. That means you are expected to provide 50 workers to the principal employer. It may be true that at present you have fewer than 20 workers. Moreover, your Principal employer wants you to hold a license so that many confusions can be avoided. Now, having obtained a license under the CLRA Act, you are not going to be under pressure from the labor department. You can maintain the registers and send returns as required under the Act. Certain registers like Wage Register and pay slip can be avoided just on the grounds that you pay the wages through the bank. Though maintaining books in soft forms requires approval from the labor authorities, this will not create many issues. Similarly, if you have issued identity cards to your employees, you may not need any employment cards for your workers. It is common that you would have a muster roll of your workers, and that can be continued. With regard to overtime as well, if your paysheet extracted from the payroll contains the details, that is sufficient.

I would suggest that if you have obtained Form IV from the employer, you should apply for the license based on that, even if you employ fewer than 20 workers. This will give the contractor an identity.

Madhu.T.K

Dear T. Thirumurugan,

The registers and criteria of Labour Licence mentioned by you are correct.

There are two points: the registers are applicable to every contractor who deploys labor at a Principal Employer establishment, whether they have obtained a labor license or not. The License is a must when you come under the preview of the 20-person definition.

I have a different opinion. If the current strength is less than 20, you should not apply for the Labour Licence. However, as stated by Mr. Madhu, if this gives you a recognized identity (as an established contractor) and can be helpful in securing big contracts, you can go for the license.

Since you have already applied in Form IV, please follow up with the Labor Office for the next process. An important point to note is whether you have deposited the Security Money and License Fees through a challan (GAR 7). If the challans have been deposited and submitted to the Labor Office with the application, then you are in a safe zone. Once the challans are deposited, it is the Labor Office's liability to issue the License (Form VI) to the contractor.

The Half-Yearly Labor Return (Form XXIV) can be submitted only after obtaining the Labor License.

Also, note that the Principal Employer is liable to apply for and obtain a Registration Certificate in Form 1 and submit the Annual Labor Return (Form XXV) regarding subcontracting labor.