Contract Labour Guide (CLRA to OSH Code)

Reviewed 19 September 2026. The four Labour Codes came into force on 21 November 2025, and Central Rules were notified in May 2026. State rules are still being notified. Thresholds and procedures below reflect the Central position; confirm your state's status before acting. This guide is general information, not legal advice.

What changed

The Contract Labour (Regulation and Abolition) Act, 1970 no longer stands alone.

Confirm you understand the timelineThe Labour Codes came into force on 21 November 2025. Contract labour provisions now sit in the Occupational Safety, Health and Working Conditions (OSH) Code, and the Central OSH Rules were notified on 8 May 2026.
Check your state's statusRules for establishments where the state is the appropriate government come from state governments, and they are being notified unevenly. Earlier procedures generally continue in the interim.
Record legacy licences and their validityExisting registrations and licences generally remain valid subject to intimation to the registration officer within the specified time.
Note the move to single registrationThe OSH Code replaces several overlapping registrations with a single registration and a single contractor licence.

Who is who

Terms carry the same meaning as before, in plain words.

Principal employerThe business that engages contractors to do work. Usually you.
ContractorThe business that supplies contract workers to the principal employer.
Contract workerA worker employed through a contractor rather than directly by the principal employer.
Appropriate governmentCentral or state government, depending on the establishment. It decides whose rules and procedures apply.

Licensing and registration

Who needs what, and when.

Identify every contractor who has employed 50 or more contract workers in the preceding twelve monthsUnder the Central OSH Rules such a contractor needs a licence, valid for five years. Confirm the threshold and procedure in your state.
Confirm each contractor holds a valid licence for the site and the work
Confirm your own registration or intimation as principal employer is current
Apply through the prescribed portal and keep the acknowledgementThe Central Rules use the Shram Suvidha portal for registration.
Diarise renewals well ahead of expiry

Principal employer duties

Responsibility does not transfer with the contract.

Engage only licensed contractors
Ensure prescribed welfare facilities are provided at siteDrinking water, toilets, rest areas and first aid are the usual baseline.
Verify that wages are paid on time and in fullWhere a contractor fails to pay, liability can fall on the principal employer.
Verify EPF and ESIC payments for contract workers
Maintain records of contractors and contract workers

Contractor duties

What you should expect every contractor to demonstrate.

Hold a valid licence and display it as required
Pay wages on the due date, through a bank account
Maintain registers of workers, wages, attendance and overtime
Deposit EPF and ESIC contributions and file returns
Provide safety equipment and training to workers

Core activities and equal treatment

Two areas where the new framework is stricter.

Review which activities you contract outThe OSH Code restricts engaging contract labour in core activities of an establishment, subject to exceptions. Take advice before relying on an exception.
Review pay parity between contract and permanent workers doing comparable workThe Codes tighten expectations here. Compare wage structures, not only headline rates.
Confirm overtime is paid at the applicable rate

Action plan

A sensible order of work for the next quarter.

Build a register of every contractor with licence type, number and expiry
Flag contractors approaching the licensing threshold
Update contractor agreements for the new law and terminology
Set renewal alerts and a monthly proof-of-compliance routine
Schedule a compliance audit of your highest-risk contractors

Contract Labour Guide (CLRA to OSH Code)

What changed

Who is who

Licensing and registration

Principal employer duties

Contractor duties

Core activities and equal treatment

Action plan

Keep going

Contractor Compliance Checklist

Contractor Onboarding Checklist

Labour Compliance Guide

Have licences and renewals tracked for you