Registrations & Licences · Labour & Industrial Licences
Labour Licence Registration
The Occupational Safety, Health and Working Conditions Code, 2020 (OSH Code) — in force since 21 November 2025, with final central rules notified on 8 May 2026 — now governs contract labour across India, having repealed and subsumed the Contract Labour (Regulation and Abolition) Act, 1970 along with 12 other central labour enactments.
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The Occupational Safety, Health and Working Conditions Code, 2020 (OSH Code) — in force since 21 November 2025, with final central rules notified on 8 May 2026 — now governs contract labour across India, having repealed and subsumed the Contract Labour (Regulation and Abolition) Act, 1970 along with 12 other central labour enactments. Under the OSH Code, an establishment engaging 50 or more contract workers must obtain a single common registration, and a contractor deploying 50 or more workers must hold a common contractor's licence valid for five years across multiple establishments — a significant simplification from the old Act's state-by-state, annually renewed, per-establishment licence regime. PNPC Global has managed labour law compliance for manufacturers, IT parks, logistics operators, construction companies, and facility management firms across India and the UAE since 1986. We assess your workforce structure against the new unified thresholds, manage your transition from legacy CLA registrations to OSH Code registration, handle all correspondence with the licensing authority through the Shram Suvidha portal, and keep your compliance current through every renewal cycle.
What it costs
No hidden charges. The exact figure is set in your engagement letter.
The Occupational Safety, Health and Working Conditions Code, 2020 (OSH Code) is one of the four labour codes enacted by Parliament to consolidate and simplify India's labour law framework. The Code, along with the Code on Wages 2019, the Industrial Relations Code 2020, and the Code on Social Security 2020, was brought into force across India with effect from 21 November 2025, and the Ministry of Labour and Employment notified the final central rules under all four codes on 8 May 2026 (following a corrigendum in December 2025 that adjusted certain provisions of the original notification). The OSH Code consolidates 13 earlier central labour enactments — including the Contract Labour (Regulation and Abolition) Act, 1970, the Factories Act, 1948, the Inter-State Migrant Workmen Act, 1979, and the Building and Other Construction Workers Act, 1996 — into a single code with unified definitions, thresholds, and administrative machinery. The legacy Contract Labour Act no longer operates as an independent statute; its subject matter is now dealt with under Chapter V of the OSH Code and the corresponding central and state rules.
Under the OSH Code, the threshold for contract labour provisions has been raised from 20 workers (the erstwhile CLA threshold) to 50 or more contract workers, employed on any day of the preceding twelve months, applying uniformly to both the principal employer (called the 'establishment' engaging contract labour) and the contractor supplying that labour. Establishments and contractors below the 50-worker threshold fall outside the Chapter V contract-labour provisions, though other Code obligations (general safety, health, and working-conditions duties) may still apply depending on the nature and size of the establishment. States retain limited rule-making latitude on procedural matters, but the core threshold and licence architecture are now uniform across the country in a way the pre-2025 regime, with its patchwork of state-reduced thresholds, was not.
The most significant structural change is the shift from a state-specific, per-establishment, annually renewed contractor licence to a common licence framework. A contractor may now apply for a single licence covering multiple establishments — including establishments in different states — through the Shram Suvidha portal (Form XXI under the Central Rules), and that licence is valid for five years rather than the erstwhile 12-month term. Similarly, establishments that previously required separate registrations under multiple Acts (Factories Act, CLA, BOCW, and others) can now obtain a common registration under the OSH Code covering all applicable obligations for that establishment. This removes much of the duplicated, state-by-state paperwork that characterised compliance under the 1970 Act, though the transition itself — moving from legacy CLA registrations and contractor licences to OSH Code registrations and licences — is an active compliance exercise for every business that previously held CLA registrations.
The OSH Code preserves the core protective architecture of the erstwhile CLA: the principal employer (now generally referred to as the establishment engaging contract labour) retains obligations around welfare amenities, wage oversight, and subsidiary liability for unpaid wages; the contractor remains the direct employer of the deployed workforce responsible for day-to-day wage payment, statutory registers, and welfare facility provision at the site. Because the transition from the 1970 Act to the OSH Code is recent — rules were finalised only in May 2026 and several states are still operationalising their own rules and digital workflows under the new framework — businesses need active guidance both to migrate existing CLA registrations and contractor licences to the new regime and to file fresh applications correctly under the unified system.
When OSH Code contract labour registration or licensing is mandatory
Your establishment engages 50 or more workers as contract labour on any day in the preceding 12 months — you must obtain a common registration under the OSH Code before engaging (or continuing to engage) contract labour through a contractor
You are a contractor supplying or deploying 50 or more workers to one or more establishments — you must hold a valid common contractor's licence under the OSH Code; a single licence can now cover multiple establishments, including across states
You previously held registrations or contractor licences under the erstwhile Contract Labour (Regulation and Abolition) Act, 1970 — these require active migration or fresh application under the OSH Code framework; legacy CLA paperwork does not automatically continue in perpetuity under the new regime
You are expanding operations to a new state, setting up a new manufacturing plant, a warehouse, or a facility management contract with contract labour above the 50-worker threshold — registration and licensing should be confirmed before work commences
Your engagement with a contract labour vendor is changing — new contractor, new scope of work, headcount changes near or across the 50-worker threshold — any material change should trigger a fresh applicability review and, where required, an amendment or new licence
You have received a notice from the labour department, a trade union, or during an inspector's visit identifying a compliance gap — regularisation under the OSH Code requires a structured application with supporting documentation
Your company is undergoing due diligence for a private equity investment, M&A transaction, or a large government or PSU contract — labour law compliance status (including the CLA-to-OSH-Code transition) is now a standard due diligence item and an unmigrated or lapsed registration is a diligence red flag
Your contractor's OSH Code common licence (5-year validity) is approaching renewal, or your legacy CLA licence needs to be converted before its residual validity or grace period under the transition rules expires
When OSH Code contract labour provisions may not apply or a different route is needed
Your establishment or contractor engages fewer than 50 workers as contract labour and has not crossed that threshold on any day in the preceding 12 months — the Chapter V contract-labour provisions of the OSH Code do not apply, though other Code obligations and state shops and establishment requirements may still apply
All workers are directly on the payroll of your company as regular employees — the contract-labour provisions apply specifically to workers deployed through an independent contractor; if a labour court reclassifies the arrangement as direct employment, the contract-labour licensing question becomes moot but direct-employment obligations (Industrial Relations Code, Code on Social Security) apply instead
Your sector is covered by a specific set of provisions with its own registration and cess regime — building and construction work carries its own obligations (now consolidated into the OSH Code's building-worker chapter and the associated cess), which run alongside but are procedurally distinct from the general contract-labour registration
You are an establishment whose category of work has been notified as prohibited from engaging contract labour — in this case, registration is not the answer; the government-notified prohibited activity must move to direct employment and cannot proceed through a contractor at all
Your requirement is for apprenticeship-based engagement under the Apprentices Act, 1961 — apprentices remain a distinct statutory category, and the OSH Code's contract labour provisions do not apply to genuine apprenticeship arrangements
Your state has not yet fully operationalised its own OSH Code rules and digital workflow, and the establishment already holds valid legacy CLA registration and contractor licences within a transition/savings-clause window — confirm the applicable transitional position for your specific state before assuming an immediate re-filing is required, since implementation is still being operationalised state by state as of mid-2026
Establishment Registration vs Contractor Licence vs related regimes under the OSH Code, 2020
| Feature | Establishment Registration (OSH Code) | Contractor Common Licence (OSH Code) | Building Worker / Construction Cess | Shop & Establishment (State Act) |
|---|---|---|---|---|
| Who applies | The establishment / company engaging contract workers through a contractor | The contractor / labour supplier deploying the workers | Employer undertaking building or construction work | Any commercial establishment — employer directly |
| Trigger threshold | 50+ contract workmen engaged on any day in preceding 12 months (raised from 20 under the erstwhile CLA) | 50+ workers deployed; a single common licence can now cover multiple establishments and states | Building/construction work of a prescribed value or worker count, per the OSH Code's building-worker provisions | Any establishment with employees — threshold varies by state |
| Governing law | Occupational Safety, Health and Working Conditions Code, 2020 (Chapter V) and Central/State OSH Rules (notified May 2026) | Occupational Safety, Health and Working Conditions Code, 2020 (Chapter V) and Central/State OSH Rules | Occupational Safety, Health and Working Conditions Code, 2020 — building-worker chapter and cess provisions | State-specific Shops and Establishments Act (largely unaffected by the labour codes) |
| Application mode / form | Common registration application via Shram Suvidha portal — unified form replacing separate Factories Act / CLA / BOCW applications | Form XXI (Central Rules) via Shram Suvidha portal for a common contractor licence | Registration and cess return through the applicable state building-worker mechanism, now integrated with OSH Code administration | State-specific forms and portals — varies by state |
| Authority | Registering/licensing authority notified under the OSH Rules — central sphere via Chief Labour Commissioner (Central); state sphere via the state labour department | Same authority as establishment registration, through the common licensing mechanism | State building-worker welfare board / OSH authority, as notified | State Labour / Commerce Department |
| Validity | Ongoing common registration — amend on material change in headcount or scope | 5 years (a major change from the erstwhile CLA's 12-month contractor licence) | Project/duration-linked; cess remains tied to construction cost | Annual renewal in most states |
| Fee structure | Fee prescribed under the OSH Rules, calculated on headcount bands — qualitative guidance recommended given the framework is newly operational and fee schedules are still being finalised or clarified in several states | Fee and security deposit prescribed under the OSH Rules for the 5-year common licence — materially different from the old annual, per-establishment fee structure | Cess remains a percentage of construction cost under the building-worker cess provisions | State schedule; typically a modest annual fee |
| General penalty for default | Section 94 of the OSH Code — general penalty for contraventions without a specified penalty: fine not less than ₹2,00,000, extendable up to ₹3,00,000; specific contraventions (e.g., safety violations causing harm) attract higher, separately prescribed penalties | Same general penalty framework under Section 94 applies to contractors operating without a valid licence, subject to the specific offence provisions of the Code | Separate penalty provisions under the building-worker chapter | State Act penalties (generally unaffected) |
| Registers to maintain | Registers and records as prescribed under the OSH Rules — largely continuing the substance of the earlier Register of Contractors requirement in a rationalised, in several cases digital, format | Muster roll, wage register, and other prescribed registers under the OSH Rules — the earlier CLA registers (Forms XII–XXIII) are being aligned into the unified OSH record-keeping formats | Register of building workers and safety records as prescribed | Attendance, wages, leave records as per state rules |
| Subsidiary wage liability | Yes — the establishment engaging contract labour remains liable if the contractor fails to pay wages, consistent with the protective principle carried over from the erstwhile CLA | No — the contractor is the direct employer of the contract workers | Yes — comparable subsidiary-liability principle applies to building work | Direct employer-employee relationship; no subsidiary liability issue |
The OSH Code, 2020 replaced the Contract Labour (Regulation and Abolition) Act, 1970 with effect from 21 November 2025, with final central rules notified on 8 May 2026. Establishment registration and contractor licensing remain two distinct obligations linked to the same engagement, but the licence is now a common, multi-establishment, 5-year instrument rather than the erstwhile state-by-state annual licence. Because several states are still operationalising their own OSH Rules and digital workflows, confirm the current procedural position for each state of operation — the transition from legacy CLA paperwork is an active exercise for most existing clients as of mid-2026.
| # | Stage & What PNPC Does | Why This Step Matters | Timeline |
|---|---|---|---|
| 1 | Applicability & Transition Assessment — OSH Code threshold, legacy status, jurisdiction mapping | Before any form is filed, we determine: (a) does the OSH Code's 50-worker contract labour threshold apply to your establishment or contractor operation; (b) do you hold legacy CLA registrations or contractor licences that need migration or fresh application under the new framework; (c) which authority governs — central sphere via the Chief Labour Commissioner (Central) or the relevant state labour department; (d) has your state fully operationalised its OSH Rules and Shram Suvidha workflow. This step prevents filing under an outdated framework or missing a transition deadline. | Day 1–3 |
| 2 | Document Collection — Establishment and workforce documents | We issue a structured document checklist tailored to your jurisdiction and current registration status (fresh application vs. migration from legacy CLA registration). Common causes of delay: mismatched entity names between MCA records and PAN, utility bills outside the required window, incomplete contractor engagement details, unsigned declarations. We review all documents before submission and raise queries with you before the authority does. | Day 3–7 |
| 3 | Fee and Security Deposit Calculation | Fee for the common establishment registration and the security deposit for the contractor's common licence are calculated per the prescribed OSH Rules schedule for the applicable headcount band. Because fee schedules are newly operational following the May 2026 rules notification and some state-level amounts are still being clarified, we confirm the current applicable figure with the authority before any payment is made — avoiding rejection from an outdated or mismatched fee. | Day 5–10 |
| 4 | Form Preparation — Common registration / Form XXI licence application | For establishments: the unified OSH Code registration application, consolidating what previously required separate filings under the Factories Act, CLA, and other Acts. For contractors: Form XXI under the Central Rules, specifying the establishment(s) covered, nature of work, duration, and maximum workmen, filed through the Shram Suvidha portal for a common, potentially multi-state, licence. All declarations are reviewed by a qualified professional before submission. | Day 7–14 |
| 5 | Submission — Shram Suvidha portal or state-notified mechanism | The Shram Suvidha portal is the central digital gateway for OSH Code registrations and licensing; several states are progressively integrating their own workflows onto this system, while others continue to operate parallel state portals during the transition period. We handle submission through the correct channel for your jurisdiction and obtain an acknowledgement reference. | Day 10–15 |
| 6 | Query Management — Responding to the registering/licensing authority's deficiency notices | The authority may raise queries — missing documents, clarification on contract work, or additional undertakings. These queries are time-bound; failure to respond within the specified period risks rejection. PNPC responds to all queries on your behalf, coordinates additional documentation, and follows up with the authority. | Day 15–35 (if query raised) |
| 7 | Registration / Licence Receipt | The establishment registration confirmation or the contractor's common licence is issued by the notified authority. We obtain the reference/certificate, provide you with a certified copy, and record the validity period (ongoing for registration; 5 years for the contractor licence) and next-review date in your compliance calendar. | Day 20–60 (varies by state and authority backlog, given the framework's recent operationalisation) |
| 8 | Migration of Legacy CLA Registrations / Licences | For establishments and contractors that held valid registrations or licences under the erstwhile Contract Labour (Regulation and Abolition) Act, 1970, we assess the transitional position under the OSH Code and rules — whether a formal migration application, a fresh filing, or reliance on a savings/transition provision is the correct path for your specific state — and execute the appropriate action rather than assuming legacy paperwork continues indefinitely. | Ongoing through the transition period |
| 9 | Register and Record-Keeping Setup | The OSH Rules prescribe registers and records that must be maintained from the date of commencement of contract work, rationalising the erstwhile CLA's multiple separate registers (Forms XII–XXIII) into the unified record-keeping formats required under the Code. PNPC sets up compliant register formats — digital where the authority accepts electronic records — and briefs your HR/operations team on maintenance obligations. | Day 1 of commencement of work |
| 10 | Commencement / Completion Notifications | Where the applicable OSH Rules require notification of commencement or completion of a specific contract engagement (continuing the protective intent of the erstwhile Form VI-A notice), PNPC maps each contract's start and end dates and files the required notification within the prescribed period under the current rules. | Within the period prescribed by the applicable OSH Rules for each commencement/completion |
| 11 | Contractor Common Licence Renewal — Before the 5-year term expires | The contractor's common licence under the OSH Code is valid for 5 years — a materially longer cycle than the erstwhile 12-month licence, but renewal planning must still begin well in advance given the volume of documentation and any headcount changes across the licence's multiple covered establishments. PNPC tracks the 5-year validity window and initiates renewal preparation ahead of expiry. | Renewal preparation to commence at least 6 months before the 5-year expiry |
| 12 | Compliance Calendar and Ongoing Advisory — Full-year monitoring | Beyond registration and licensing: we track welfare facility compliance, wage oversight obligations, any state-specific filings still required during the transition, and integrate contract labour compliance into your overall statutory compliance calendar. We provide an annual compliance status report covering all OSH Code registrations, contractor licences, and register maintenance. | Year-round, every year |
Because the OSH Code's contract labour provisions and final rules were only notified in November 2025 and May 2026 respectively, actual processing timelines are still stabilising as authorities operationalise the Shram Suvidha-based workflow; several states are at different stages of implementing their own rules. PNPC's pre-submission document review and continuous monitoring of each state's operational status reduces query rates and helps avoid filing under an outdated procedure.
Certificate of Incorporation (COI) or Partnership Deed / Trust Deed — as applicable to the entity type — certified true copy
PAN card of the establishment / company — mandatory for all fee payment and official correspondence
GST Registration Certificate — required by most labour authorities as proof of an active business entity
Existing Factory Licence, Shops and Establishment Registration, or legacy CLA Registration Certificate (if previously held) — needed to assess transition status under the OSH Code
Proof of registered office address — recent utility bill (electricity, telephone) in the establishment's name, within the last 2 months
Memorandum and Articles of Association / LLP Agreement — to confirm the nature of business activity and authorised signatories
Board Resolution / Authorisation — resolution authorising the designated manager or officer to apply for and sign the registration/licence application on behalf of the establishment
Details of the designated manager responsible for compliance — full name, designation, address, PAN, contact number
Maximum number of contract workmen engaged — day-wise peak count for the preceding 12 months, if the establishment is already operational, to confirm crossing of the 50-worker OSH Code threshold
Nature of work performed by contract labour — a clear, specific description (e.g., 'housekeeping and facility maintenance', 'loading and unloading of goods', 'civil construction and finishing') — vague descriptions invite queries
Names and addresses of contractors engaged — at least the primary contractors; updated as new contractors are onboarded
Copies of existing contracts / work orders with contractors — to confirm scope, duration, and contractor identity for the authority
Estimated duration of contract work — relevant to how the contractor's common licence coverage is structured for your establishment
Establishment registration confirmation of each principal establishment the contractor intends to cover under the common licence
Agreement or work order between the establishment and the contractor — duly signed by both parties, clearly specifying the nature of work, duration, and workmen deployment
List of workmen to be deployed — names, addresses, and designations; an indicative list at the time of application, formalised in the prescribed register before commencement
Proof of PAN and address of the contractor entity — sole proprietor / partnership firm / company as applicable
Security deposit payment confirmation — the OSH Rules prescribe a security deposit for the contractor's common licence, calculated on the deployed headcount and covering the 5-year validity period
Bank account details of the contractor — for verification purposes and for wage payment compliance under the Code on Wages, 2019
Details of welfare amenities to be provided — canteen (generally required where 100 or more workers, including contract workers, are engaged, as prescribed under the OSH Rules), rest rooms, first-aid facilities, drinking water, and sanitation facilities at the ratios prescribed under the OSH Rules — the authority may ask for a declaration or layout plan
Creche facility details where the establishment engages 50 or more workers (a threshold now set generally under the OSH Rules rather than being tied only to the number of women workers) — including proposed facility dimensions and staffing arrangements
Safety and health undertaking — declaration by the contractor or establishment (as applicable) confirming that prescribed welfare amenities under the OSH Code will be maintained throughout the contract period
Copy of the erstwhile Principal Employer Registration Certificate (Form II) or Contractor Licence (Form VI) issued under the Contract Labour (Regulation and Abolition) Act, 1970, where previously held
Details of the residual validity period of any legacy contractor licence, to plan the migration or fresh-filing timeline before that validity lapses
Any state-specific transition notification, circular, or savings-clause guidance issued by the relevant state labour department on migrating from CLA registrations to OSH Code registrations
A gap assessment prepared by PNPC comparing your existing CLA-era compliance (registers, notices, welfare facilities) against the current OSH Rules requirements
State professional tax registration certificate — required in several states as part of establishment verification
EPFO / ESIC registration certificates — the contractor's registration and payment compliance under EPF and ESI is verified by many authorities as part of the licence process; unregistered contractors create subsidiary exposure for the establishment engaging them
Digital signature or Aadhaar-based eSign of the authorised signatory — required for online submission on the Shram Suvidha portal and, in states still operating a parallel portal, on that state system
Local body / municipal NOC — some local authorities and industrial estates require an NOC from the municipal corporation or estate authority before a registration or licence application is processed
Building plan / site layout for construction projects — required where the establishment is a building or construction site under the OSH Code's building-worker provisions
State-wise split of workmen — while a common contractor licence can now cover multiple establishments and states, the underlying headcount and nature-of-work details for each covered establishment must still be documented
Confirmation of each state's current OSH Rules operational status — some states have fully adopted the Shram Suvidha-based common licensing workflow, others are still finalising their own rules or running a parallel legacy process, and this affects the correct filing route
Nomination of a locally accessible authorised representative in each state where required by the notified authority
Evidence of state-level shops and establishment registration (or factory registration) for the establishment in that state, where still required as a supporting document to the OSH Code registration
| Phase | Trigger / Event | PNPC Action | Risk If Ignored |
|---|---|---|---|
| Pre-Engagement Assessment | Decision to engage contract labour or award a contract | Confirm applicability of the OSH Code's contract labour provisions — headcount against the 50-worker threshold, nature of establishment, jurisdiction (central vs state sphere). Map every state where contract labour will be deployed and confirm each state's current OSH Rules operational status. | Commencing contract work above the threshold without registration or a valid contractor licence — exposure to the OSH Code's general penalty under Section 94 (fine of ₹2,00,000 to ₹3,00,000) and potential work-stoppage directions. |
| Establishment Registration | Before engaging contract labour above the 50-worker threshold | File the common registration application through the Shram Suvidha portal or the applicable state mechanism, with all required documents and prescribed fee. Track acknowledgement and follow up with the authority. Confirm registration is in place before the contractor commences work. | Operating without registration exposes the establishment to the OSH Code's general penalty provisions; authorities can direct work stoppage, and EPFO/ESIC often verify contract labour compliance during joint inspections. |
| Contractor Common Licence Procurement | Before the contractor commences work at any covered establishment | For contractor clients: file the common licence application (Form XXI, Central Rules) via Shram Suvidha, referencing the covered establishment(s), work order, and security deposit. Obtain the licence before Day 1 of deployment. For establishment clients: verify that each engaged contractor holds a valid current licence covering that establishment. | Contractor working without a valid licence risks prosecution and penalty under the OSH Code; the establishment engaging an unlicensed contractor is also exposed, including subsidiary liability for unpaid wages under the Code's wage-protection provisions. |
| Commencement / Completion Notification | Within the period prescribed under the applicable OSH Rules for each contract | File the prescribed commencement notification with the registering/licensing authority, with details of the contractor, nature of work, number of workmen, and commencement date, and a corresponding completion notification when the engagement ends. PNPC tracks each new contract and triggers these filings within the prescribed window. | Non-filing of required notifications is treated as a compliance gap during inspection; labour authorities routinely check for these records, and absence is treated as evidence of an incomplete compliance position. |
| Register Maintenance | From Day 1 of contract commencement, ongoing | Set up all prescribed registers in the current OSH Rules format (rationalised from the erstwhile CLA's separate Forms XII–XXIII). Brief HR / site supervisors on daily muster roll maintenance, wage register updates, and record-keeping. Periodic review during PNPC's monthly/quarterly compliance review visits. | Registers not maintained or maintained incorrectly expose the establishment/contractor to penalty under the OSH Code and create adverse inference in wage disputes with contract workers — registers remain the primary evidence in any wage audit. |
| Wage Payment Compliance | Monthly — on the prescribed wage day | Monitor that contractors are paying wages within the period prescribed under the Code on Wages, 2019. If the contractor fails, the establishment engaging the labour must step in and pay, recovering the amount from the contractor — the subsidiary wage liability principle carried forward from the erstwhile CLA. PNPC advises establishments to include a wage-default clause in the contractor agreement and to require monthly wage payment certificates. | The establishment's subsidiary liability for unpaid wages cannot be contracted away. If a contractor defaults, the labour authority can direct the establishment to pay immediately; recurring defaults attract audit scrutiny and departmental notices. |
| 5-Year Common Licence Renewal | Renewal planning to begin at least 6 months before the 5-year licence term expires | Prepare the renewal application with updated workmen count across all covered establishments, renewed security deposit (if increased), and any change in nature of work or duration. PNPC tracks the licence's 5-year expiry date and manages the renewal proactively — a longer planning cycle than the erstwhile annual renewal, but with correspondingly higher stakes if missed. | A lapsed common licence affects every establishment it covers simultaneously — a materially larger exposure than the erstwhile single-establishment annual licence. All covered work may need to cease until renewal, and prosecution exposure applies to the contractor and, in respect of subsidiary obligations, potentially the establishments engaged. |
| Headcount Increase Beyond Licensed Limit | When contract worker deployment exceeds the registered/licensed maximum | File an amendment application to increase the maximum workmen stated in the registration or licence before deploying the additional workers, with revised fee payment for the incremental headcount. PNPC monitors monthly headcount reports for clients on a retainer compliance plan. | Deploying more workers than the licensed maximum is itself a violation of the licence condition, risking penalty and licence review. The establishment's own registration may also require amendment if total contract workers across all contractors exceed the registered maximum. |
| Legacy CLA Migration | Ongoing, until each establishment/contractor's transition is complete | Assess and execute the correct transition path from any pre-existing Contract Labour Act registration or licence to the OSH Code framework for each state of operation, in line with the applicable transition/savings provisions and state-specific guidance. PNPC prioritises clients whose legacy licences are closest to their residual validity date. | Assuming a legacy CLA registration or licence continues indefinitely without confirming the applicable transition position risks an unrecognised compliance gap once the transitional window in a given state closes. |
| Annual Returns / State-Specific Filings | As prescribed under the applicable OSH Rules — typically annually | Several states require annual or periodic returns summarising contract work done, contractors engaged, workmen employed, wages paid, and welfare amenities provided during the period. PNPC tracks state-specific filing deadlines under the current rules and files within the prescribed period. | Late or missed periodic returns attract penalty under the respective rules and flag the establishment for priority inspection by the labour department. |
| Inspector Visit / Show Cause Notice | Unannounced — labour inspector or the notified Inspector-cum-Facilitator under the OSH Code | Assist in producing all required documents and registers during inspection. Draft and submit responses to show cause notices within the specified timeline. Assess any rectification required and take corrective action, including engaging with the authority on compounding of offences where the Code permits it. | Non-cooperation with an inspector or failure to produce registers during inspection risks prosecution, work stoppage, and adverse orders affecting business continuity at the site. |
| Abolition / Prohibited Category Notification | If the government notifies a category of work as prohibited from engaging contract labour | Advise on the implications of a prohibition notification — the contractor's licence cannot be used for the notified category, and the establishment must convert the engagement to direct employment. Assist with the transition — employment documentation, payroll setup, and EPF/ESI registration for the absorbed workers. | Continuing to deploy contract labour in a prohibited category after a government notification is a serious violation, risking prosecution and a mandatory obligation to absorb the affected contract workers as direct employees. |
The four Labour Codes — Code on Wages 2019, Industrial Relations Code 2020, Occupational Safety, Health and Working Conditions Code 2020, and Code on Social Security 2020 — came into force with effect from 21 November 2025, with the Ministry of Labour and Employment notifying final central rules on 8 May 2026 (following a corrigendum in December 2025). States are at different stages of notifying and operationalising their own rules and digital workflows under the OSH Code as of mid-2026. PNPC actively tracks each state's implementation status and advises clients on the correct current filing route, including the migration of any legacy Contract Labour Act registrations and licences.
Is the Contract Labour (Regulation and Abolition) Act, 1970 still the law that governs contract labour in India?
No, not as a standalone statute. The Contract Labour (Regulation and Abolition) Act, 1970 has been repealed and its subject matter subsumed into the Occupational Safety, Health and Working Conditions Code, 2020 (OSH Code), which came into force on 21 November 2025 along with the other three labour codes. The Ministry of Labour and Employment notified the final central rules under all four codes on 8 May 2026. Businesses that previously relied on CLA registrations and contractor licences now operate under the OSH Code's Chapter V contract labour provisions, and any advice, documentation, or filing referencing only the 1970 Act should be treated as outdated unless confirmed otherwise for a specific transitional situation in your state.
What headcount now triggers contract labour registration and licensing requirements?
Under the OSH Code, the threshold for the contract labour provisions is 50 or more workmen engaged as contract labour on any day of the preceding 12 months — a significant increase from the 20-worker threshold (10 in several states) under the erstwhile Contract Labour Act. This threshold applies uniformly to both the establishment engaging contract labour and the contractor supplying it, replacing the earlier patchwork of state-specific reduced thresholds with a single national figure.
What is the difference between establishment registration and a contractor's common licence under the OSH Code?
These remain two distinct obligations, continuing the structure of the erstwhile CLA but now unified and simplified. The establishment registration is obtained by the business that engages a contractor to supply workers. The contractor's common licence is obtained by the entity that recruits, pays, and supplies the workers, and — unlike the old system — a single common licence can now cover multiple establishments, including establishments in different states, and is valid for five years rather than 12 months. Both must be in place before contract work begins at a given establishment.
My business already holds a Principal Employer Registration and contractor licences issued under the old Contract Labour Act — do these still work?
This depends on the transitional position in your specific state, which is still being operationalised as of mid-2026. In general, existing CLA-era registrations and licences do not continue indefinitely as though nothing has changed — most states are implementing some form of migration path, savings clause, or transition window under which legacy paperwork remains valid for a defined period or must be converted into an OSH Code registration/licence. Because implementation timelines differ by state, we recommend a state-by-state review rather than assuming either automatic continuation or automatic invalidity.
How long is a contractor's common licence valid under the OSH Code?
Five years — a substantial change from the 12-month validity that applied under the erstwhile Contract Labour Act. This longer validity period reduces the annual renewal burden but increases the consequence of a lapse, since a single common licence can now cover multiple establishments simultaneously.
What is the security deposit for a contractor's common licence, and how is it calculated?
The OSH Rules prescribe a security deposit for the contractor's common licence, calculated based on the number of workmen to be deployed and covering the licence's five-year validity period. Because the rules were only finalised in May 2026, the exact fee and deposit schedule is still being operationalised in some states, and we recommend confirming the current applicable figure with the authority at the time of filing rather than relying on the erstwhile CLA's ₹10-per-workman schedule, which no longer applies under the new framework.
What welfare amenities must be provided to contract workers under the OSH Code?
The OSH Rules continue the protective welfare framework from the erstwhile CLA, generally requiring a canteen where 100 or more workers (including contract workers) are engaged, rest rooms, drinking water, and sanitation facilities at prescribed ratios, and creche facilities where the establishment engages a prescribed threshold of workers (now generally set with reference to overall workforce size under the OSH Rules, rather than being tied only to the number of women workers as under the old Act). Exact thresholds and ratios should be confirmed against the current rules applicable to your establishment's state.
What is the penalty for operating without a valid registration or contractor licence under the OSH Code?
Section 94 of the OSH Code provides a general penalty for contraventions of the Code or rules for which no specific penalty is otherwise prescribed: a fine of not less than ₹2,00,000, which may extend to ₹3,00,000. This is a materially higher penalty framework than the erstwhile Contract Labour Act's Section 23, which prescribed imprisonment up to three months and/or a fine of up to ₹1,000. Specific contraventions — for example, safety violations resulting in harm to a worker — carry separately prescribed, generally higher penalties under other sections of the Code.
Can the government still prohibit contract labour in certain categories of work under the OSH Code?
Yes. The OSH Code preserves the government's power to prohibit the engagement of contract labour in specified processes, operations, or work in an establishment, following the advisory board mechanism carried forward from the erstwhile CLA structure. When work is prohibited, the establishment must directly employ the workers who were performing that work, subject to conditions in the notification. Several categories of 'core' or 'perennial' work notified as prohibited under the old Act are being reviewed and, in some cases, re-notified under the new framework.
What is the subsidiary wage liability of the establishment engaging contract labour — and has it changed under the OSH Code?
The core principle is unchanged: if the contractor fails to pay wages within the prescribed period, the establishment engaging the contract labour must make good the deficiency and can recover the amount from the contractor. This liability continues under the wage-protection framework of the Code on Wages, 2019 read with the OSH Code's contract labour provisions, and remains non-contractual — it cannot be waived or excluded by agreement between the establishment and the contractor.
Does the OSH Code apply to IT companies, BPOs, and service sector companies — or only to factories and manufacturing?
The OSH Code's contract labour provisions apply to any establishment engaging 50 or more contract workers, regardless of industry. While the underlying framework originated with manufacturing and construction in mind, it has been consistently applied to IT parks (for security, housekeeping, and facility management contractors), BPOs, hospitals, educational institutions, and commercial offices. Any establishment — including a technology company, a software services firm, or a retail chain — that engages contract labour above the 50-worker threshold must register and ensure its contractors hold valid common licences.
My contractor's common licence has lapsed — can work continue while renewal is pending?
A lapsed common licence means the contractor is legally operating without authority from the date of expiry, across every establishment the licence covers. Work should not continue without a valid licence. The contractor must apply for renewal, along with the prescribed fee and any updated security deposit. Because a single common licence may now cover multiple establishments, a lapse has a broader operational impact than the erstwhile single-establishment licence — potentially affecting several sites simultaneously.
How does the OSH Code interact with EPF and ESI obligations for contract workers?
The Employees' Provident Funds and Miscellaneous Provisions Act, 1952 and the Employees' State Insurance Act, 1948 continue to apply independently to contract workers, subject to their respective headcount thresholds, alongside — and unaffected in their basic structure by — the OSH Code's contract labour provisions. The contractor, as the direct employer, must register under EPF and ESI and remit contributions for its deployed workers. If the contractor defaults, EPFO and ESIC retain the power to recover dues from the establishment engaging the labour, a liability that runs alongside the OSH Code's subsidiary wage liability principle.
What is the current status of building and construction worker compliance under the new framework?
Building and construction worker obligations — previously under the standalone Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 — are now consolidated into the OSH Code, which continues the registration and cess-based welfare funding model (a cess on construction cost, remitted to the state building-worker welfare fund) alongside the general contract labour provisions where applicable to the same project.
Does the OSH Code apply to staffing companies and manpower agencies?
Yes. Staffing and manpower agencies that deploy workers on client sites are 'contractors' for OSH Code purposes and must hold a valid common licence covering each client establishment where they deploy 50 or more workers. The staffing company remains the direct employer of the deployed workers for OSH Code, EPF, and ESI purposes. The client company — the end-user of the deployed talent — is the establishment engaging contract labour and must hold its own registration.
Can an establishment be penalised even if its contractor holds a valid common licence?
Yes. A contractor's valid licence does not insulate the establishment from its own compliance obligations. The establishment can face exposure for failing to maintain its own registration; failing to verify the contractor's licence before engagement; not ensuring welfare amenities at the premises; not filing required commencement/completion notifications under the applicable rules; and failing to make wage payments when the contractor defaults. These obligations run independently of and concurrently with the contractor's own licensing position.
What are the four Labour Codes, and when did they actually come into force?
The four Labour Codes — the Code on Wages, 2019; the Industrial Relations Code, 2020; the Occupational Safety, Health and Working Conditions Code, 2020; and the Code on Social Security, 2020 — consolidate 29 central labour statutes. They were brought into force across India with effect from 21 November 2025, and the Ministry of Labour and Employment notified the final central rules under all four codes on 8 May 2026, following a corrigendum in December 2025 that adjusted certain provisions of the original notification. States are at varying stages of notifying and operationalising their own rules under this framework as of mid-2026.
What is a 'workman' or contract worker under the OSH Code — do IT professionals and managerial staff count?
The OSH Code's contract labour provisions apply to persons engaged for manual, unskilled, skilled, technical, operational, clerical, or supervisory work through a contractor, broadly continuing the definitional approach carried forward from the erstwhile Industrial Disputes Act framework, subject to exclusions for persons employed primarily in a managerial or administrative capacity or in a supervisory capacity above a prescribed wage threshold. Because these definitional and threshold details are being finalised through the Code's rules and interpretive practice, technology companies engaging IT staff through staffing agencies should have their specific workforce composition assessed rather than assuming either inclusion or exclusion.
What powers does a labour inspector or Inspector-cum-Facilitator have under the OSH Code?
The OSH Code continues and in some respects expands inspection powers, generally including the ability to enter premises where contract labour is employed, make examinations and inquiries, require production of registers and records, examine any person employed on the premises, and take copies of documents. The Code also introduces web-based inspection scheduling and a randomised, risk-based inspection allocation mechanism in several states as part of the broader ease-of-compliance push under the labour codes, alongside traditional unannounced visits for specific complaints or safety concerns.
How does PNPC handle contract labour compliance for companies with operations across multiple states?
While the OSH Code's common licence framework reduces duplication compared to the erstwhile state-by-state annual licensing regime, states remain at different stages of notifying and operationalising their own rules, portals, and procedural requirements. PNPC maps every state where contract labour is deployed, confirms the current operational status of each state's OSH Rules implementation, prepares applications structured to take advantage of the common licence framework wherever possible, and manages all submissions through the correct current channel for each jurisdiction.
What is the fee for obtaining establishment registration under the OSH Code?
The OSH Rules prescribe a fee structure based on the maximum number of contract workers, generally following the same principle as the erstwhile CLA's Schedule I but recalibrated for the new framework and, in several states, still being clarified following the May 2026 rules notification. Rather than quote a specific rupee figure that may already be superseded by state-level clarification, PNPC confirms the exact current fee applicable to your headcount and jurisdiction directly with the authority before any payment is made.
Can a registration or contractor licence be transferred if there is a change in ownership?
Generally, no. An OSH Code registration is issued in the name of the establishment and its designated manager; a change in ownership by sale, merger, or otherwise does not automatically transfer the registration to the new owner, who typically must apply afresh and ensure all contractors hold licences identifying the new establishment. A contractor's common licence is similarly personal to the licence holder — if the contractor's business is taken over, the successor generally needs a fresh licence application.
What happens to contract workers when a contract engagement is completed or terminated?
When a contract engagement ends, the contractor generally must: issue a service or discharge document to each worker; update the workmen register with the termination date and reason; file any completion notification required under the applicable rules; ensure final wages are paid within the period prescribed under the Code on Wages, 2019; and settle any pending PF and ESI contributions. Workers with continuous service exceeding the statutorily prescribed period in a 12-month cycle may have gratuity entitlement under the Code on Social Security, 2020, through the contractor as their employer.
Are women contract workers entitled to any additional protections under the current framework?
Yes. The OSH Rules continue protections for female contract workers — separate sanitation facilities, creche provisions where the applicable worker threshold is met, and continued application of the Maternity Benefit Act, 1961 obligations to contract workers through the contractor as employer. The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 continues to apply to contract workers at the establishment's workplace, and the establishment's Internal Complaints Committee must include contract workers within its scope.
How does PNPC's contract labour compliance service differ from a generic consultant or freelance filing service?
PNPC is a practising CA firm with 40 years of statutory compliance experience across India and the UAE. For contract labour compliance specifically: we conduct a current applicability assessment under the OSH Code (not outdated CLA-era assumptions); we actively manage the transition from legacy registrations and licences to the new common-licence framework; we manage multi-state applications through a central compliance tracking system; we set up statutory registers in the current prescribed format; and we integrate contract labour compliance with your broader HR, payroll, EPF, ESI, and income-tax obligations as a unified programme.
What does PNPC's contract labour compliance package include, and what is the typical engagement model?
PNPC's engagement typically covers: initial applicability and transition assessment across all states of operation; preparation and filing of establishment registration and/or contractor common licence applications; document collection and pre-submission review; query management with the authority; receipt and delivery of the registration/licence; statutory register setup in the current prescribed format; HR team briefing on register maintenance; commencement and completion notifications for each contract as required under the applicable rules; 5-year common licence renewal planning; integration with EPF/ESI compliance calendar; and a periodic compliance status summary. Engagements are structured as either a project fee for a one-time registration/transition exercise or an annual retainer for ongoing lifecycle management.
Is contract labour law relevant to gig economy platforms — companies engaging delivery partners or freelancers?
This is one of the most actively contested areas of Indian labour law. Contract labour provisions apply to workers engaged through a contractor as a 'workman'; gig platforms typically classify their workers as independent participants rather than as employees or contract labourers. The Code on Social Security, 2020 introduces 'gig worker' and 'platform worker' as distinct statutory categories with defined social security entitlements, separate from the OSH Code's contract labour framework — but the practical implementation of gig/platform worker obligations is still being operationalised by rule-making authorities as of mid-2026.
What is the role of the authorised representative at wage payment time under the current framework?
Continuing the protective principle carried over from the erstwhile CLA, the establishment engaging contract labour is generally required to nominate a representative to be present or to oversee the process at the time wages are paid to contract workers by the contractor, with certification of amounts paid recorded in the prescribed register. This witness-and-certification function remains an important evidentiary safeguard in any subsequent subsidiary wage liability dispute.
Does PNPC assist with contract labour compliance in UAE operations?
Yes. PNPC has an operating office in Dubai and advises on UAE labour law compliance from that office. UAE employment is governed by Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations (and its amendments), with distinct provisions for worker registration under the UAE Ministry of Human Resources and Emiratisation (MoHRE), the Wage Protection System (WPS) for monthly payroll compliance, end-of-service gratuity calculation, and work permit/visa processing. Businesses in UAE Free Zones are governed by the respective Free Zone Authority regulations, which may differ. For India-UAE cross-border businesses, PNPC coordinates the compliance calendar across both jurisdictions from a single engagement team.
How quickly should an existing business act on the transition from the old Contract Labour Act to the OSH Code?
Given that the codes came into force on 21 November 2025 and final rules were notified on 8 May 2026, most businesses that previously held CLA registrations or licences should treat this as an active, near-term compliance exercise rather than a distant deadline. The specific urgency depends on your state's implementation timeline and the residual validity of any legacy licence, but waiting for a labour inspector to raise the question is not a sound compliance posture.
What records should an establishment keep to demonstrate contract labour compliance during this transition period?
In addition to the current OSH Rules-prescribed registers, we recommend establishments retain a clear compliance file documenting: the date and outcome of their OSH Code applicability assessment; copies of any legacy CLA registration/licence and its status (migrated, superseded, or still within a transition window); the current establishment registration and contractor licence documents; and a running log of contractor headcount against the 50-worker threshold. This file is valuable both for routine inspection readiness and for any future due diligence exercise.
Who determines whether central or state rules apply to a particular establishment under the OSH Code?
As under the erstwhile framework, establishments and operations falling within recognised central-sphere categories (railways, mines, major ports, oilfields, central government undertakings, inter-state operations, and similar categories) are generally governed by the central rules administered through central authorities such as the Chief Labour Commissioner (Central). All other establishments fall under the relevant state's rules and authorities. This central/state split continues under the OSH Code, though the unified national threshold (50 workers) now applies regardless of which sphere governs a given establishment.
Can PNPC audit our existing contract labour compliance position before we decide what action to take?
Yes. We offer a structured compliance audit that reviews your current registrations and licences (legacy CLA or already-transitioned OSH Code documents), verifies contractor licensing status for every vendor you engage, reviews register maintenance quality, checks welfare facility compliance at each site, and produces a prioritised gap-to-compliance action plan before recommending specific filings.
PNPC Global vs typical alternatives for contract labour / OSH Code compliance
| Criterion | PNPC Global | Online Compliance Portal | Local Labour Consultant | In-house HR Team (without CA support) |
|---|---|---|---|---|
| Currency of legal framework applied | Actively tracks the OSH Code, 2020, its May 2026 rules, and each state's implementation status; manages the transition from legacy CLA paperwork | Often slow to update after major legal transitions such as the labour codes coming into force | Variable — depends on individual practitioner's currency with the recent rule changes | Frequently still operating on pre-transition assumptions unless proactively updated |
| Applicability assessment | State-by-state threshold mapping against the current 50-worker OSH Code threshold, central vs state sphere determination, sector-specific exemption analysis | Checkbox questionnaire — generic answer, may not reflect the current threshold | Variable quality — depends on individual's experience and currency | Limited — usually does not cover multi-state or sector-specific nuances |
| Multi-state coverage | Pan-India — manages simultaneous multi-state filing programmes and helps consolidate legacy state-specific licences into the new common licence framework where supported | Limited to standard states — often not equipped for complex multi-state or transition programmes | Typically single state or region | Rarely equipped for multi-state; each state treated as a separate effort |
| Register setup | All prescribed registers set up in the current OSH Rules format on Day 1; HR team briefed on maintenance | Not provided — form-filing only | Provided in some cases; quality variable | Often improvised — may not match the current prescribed format |
| Ongoing compliance | Proactive renewal alerts (including the new 5-year common licence cycle); required notifications for each contract; periodic compliance status report; EPF/ESI integration | Renewal reminders only — no proactive filing | Varies by engagement scope | Reactive — acts when an issue arises |
| Contractor licence portfolio management | Central register of all contractor licences across all states, tracking the 5-year OSH Code validity cycle and expiry | Not provided | Not typically offered as a service | Manual tracking — prone to lapses |
| Query management | Direct response to registering/licensing authority queries; follow-up tracked to resolution | No query support — client handles queries | Support provided in most cases | Internal HR drafts responses — may lack procedural knowledge of the new framework |
| Integration with broader compliance | Integrated with EPF, ESI, payroll, income-tax, and GST compliance — single advisory relationship | No integration — separate product for each compliance area | Labour law only — no tax or payroll integration | Silos — HR for labour, Finance for tax, no integration |
| Experience | 40 years; India + UAE; manufacturing, IT, logistics, construction, facility management sectors | Technology platform — no sectoral depth | Practitioner experience — usually one sector, one region | In-house experience limited to own company's history |
| CA firm backing | All advice signed off by a practising Chartered Accountant — professional liability | No CA oversight — platform-driven | Usually not a CA firm | Not applicable |
Contract labour compliance is a professional service, not a form-filing exercise — and the shift to the OSH Code framework makes currency of legal knowledge more important than ever. The ongoing obligations — registers, notifications, welfare oversight, wage monitoring, renewal management, and now the legacy-to-current transition — require consistent, knowledgeable oversight. A registration without ongoing compliance, or a registration built on an outdated legal framework, creates the illusion of compliance while the actual obligations remain unmet.
What the PNPC package includes
- 01
OSH Code applicability and transition assessment — current 50-worker threshold analysis, central vs state sphere determination, and a clear read on your legacy CLA registration/licence status
- 02
Establishment Registration — common registration preparation, document review, fee calculation, submission via Shram Suvidha or the applicable state mechanism, query management, and certificate receipt and delivery
- 03
Contractor Common Licence Application — Form XXI preparation, security deposit calculation, multi-establishment coverage structuring, submission, and licence receipt
- 04
Statutory register setup — all prescribed formats under the current OSH Rules established in the correct layout; HR / site team briefing session on daily maintenance
- 05
Commencement / completion notifications — filed within the period prescribed under the applicable rules for each contract start and end; tracked proactively in our compliance calendar
- 06
5-year common licence renewal management — advance renewal planning beginning at least 6 months before expiry, updated security deposit calculation, and filing before the term ends
- 07
Contractor compliance verification — for establishment clients: verification that each engaged contractor holds a valid, current OSH Code common licence covering that establishment
- 08
Multi-state licence portfolio management and consolidation — mapping every legacy state-specific licence and, where supported, consolidating coverage into fewer common licences; monthly status report
- 09
Subsidiary wage liability advisory — contractual clause recommendations for contractor agreements; wage payment oversight procedure design; periodic wage certificate review
- 10
Integration with EPF, ESI, and payroll compliance — contract labour compliance woven into the broader HR statutory compliance calendar managed by PNPC
- 11
Inspection preparedness review — periodic audit of register completeness and format correctness under the current rules; readiness checklist review; pre-inspection document organisation
- 12
M&A due diligence support — contract labour compliance audit for acquisition targets, including a specific check on legacy-to-OSH-Code transition status; gap analysis and remediation before transaction completion
The legal framework for contract labour compliance changed fundamentally in late 2025 and again with the May 2026 rules — and it is not a one-time registration exercise even under the new, simplified structure. Let PNPC assess where your business actually stands today, complete the transition to the current OSH Code framework, and manage your ongoing compliance so your operations continue without interruption and your management team is never surprised by a labour department notice.