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Labour Licence

  • ✔ Mandatory legal authorization to engage contract labour
  • ✔ Ensures full compliance with labour laws and regulations
  • ✔ Protects employers from penalties, prosecution, and work stoppage
  • ✔ Safeguards worker rights, wages, and welfare benefits
  • ✔ Essential for government and large private contracts
  • ✔ Protects employers from penalties, prosecution, and work stoppage.
  • ✔ Ensures full compliance with the Contract Labour (Regulation and Abolition) Act, 1970.
  • ✔ Mandatory for execution of government and large corporate contracts.

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7 Years

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Experience Icon

7 Years

Of Experience

Cases Solved Icon

3622 +

Cases Solved

Awards Gained Icon

10 +

Awards Gained

Trusted Clients Icon

144 k +

Trusted Clients

Queries Solved Icon

36 k+

Queries Solved

Experience Icon

7 Years

Of Experience

Cases Solved Icon

3622 +

Cases Solved

Awards Gained Icon

10 +

Awards Gained

Trusted Clients Icon

144 k +

Trusted Clients

Queries Solved Icon

36 k+

Queries Solved

Overview

Introduction

A Labour Licence is a compulsory statutory approval required under Indian labour laws for contractors who engage contract labour to execute any work through a principal employer. It is issued under the Contract Labour (Regulation and Abolition) Act, 1970 and authorizes the contractor to employ a specified number of workers for a specific nature of work and defined period.
The licence is mandatory when the engagement of contract labour meets or exceeds the prescribed threshold (generally 20 or more workers, subject to state-specific rules). The licence is issued after registration of the principal employer, and without a valid Labour Licence, a contractor cannot legally deploy manpower at the work site.
The Labour Licence ensures that workers are provided with fair wages, safe working conditions, welfare facilities, and statutory benefits, while also protecting employers from legal liabilities, penalties, and suspension of work by labour authorities.

Governing Authority

Labour Licence is governed by the Contract Labour (Regulation and Abolition) Act, 1970 and the respective State Contract Labour Rules. It is issued by the State Labour Department or the Office of the Labour Commissioner.

Importance of the Registration

The licence legalizes the engagement of contract labour, ensures compliance with labour welfare provisions, and is mandatory for execution of many government, PSU, and large corporate contracts. Non-compliance can result in work stoppage and criminal liability.

Businesses Require This Registration

  • Construction and infrastructure companies
  • Manufacturing and industrial establishments
  • Contractors and subcontractors
  • Security, housekeeping, and manpower supply agencies
  • Establishments engaging outsourced or contractual workforce

Objective of Compliance

The objective is to regulate the employment of contract labour, prevent exploitation, ensure fair wages and welfare facilities, and clearly define the responsibilities of contractors and principal employers.

Related Guides

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Documents Required

Documents
  • 1 Identity proof of proprietor
  • 2 Address proof of proprietor
  • 3 PAN of proprietor
  • 4 Proof of business premises
  • 5 Work order or contract agreement
  • 1 PAN of partnership firm
  • 2 Partnership Deed
  • 3 Identity and address proof of partners
  • 4 Proof of business premises
  • 5 Work order or contract agreement
  • 1 Certificate of Incorporation
  • 2 PAN of company/LLP
  • 3 MOA & AOA / LLP Agreement
  • 4 Identity and address proof of directors/partners
  • 5 Proof of registered office
  • 6 Work order or contract agreement
  • 7 Board Resolution or Authorization Letter

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Eligibility

Applicability

Applicable to contractors engaging contract labour
Applicable when number of workers meets statutory limit
Applicable for temporary as well as long-term contracts
Applicable irrespective of business turnover

Eligibility

Applicant must be a registered contractor
Applicant must have a valid work order or agreement
Work must fall under contract labour provisions
Compliance with labour welfare and safety norms is required

Validity

Labour Licence is issued for a specified period
Validity is linked to the duration of the contract/work
Licence expires on completion or stated end date
Renewal is required if work continues beyond validity

Non-Compliance

Non-Compliance

Heavy monetary penalties under labour laws
Prohibition on employment of contract labour
Prosecution and criminal liability
Suspension or cancellation of ongoing contracts
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FAQs

Who is required to obtain a Labour Licence?

The contractor engaging contract labour must obtain the Labour Licence.

Is registration of principal employer mandatory?
Is Labour Licence required for short-term projects?
Can Labour Licence be renewed?
What happens if work is carried out without a Labour Licence?
Who is required to obtain a Labour Licence?
Is registration of the principal employer mandatory?
Is a Labour Licence required for short-term projects?
What is the validity of a Labour Licence?
What happens if work is carried out without a Labour Licence?

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What Our Clients Say

Discover what our satisfied clients have to say about their experience working with us

Sandeep Reddy
Founder, Retail Trading Business
" ARK Advisors made our audit process smooth and stress-free. Clear checklist, timely follow-ups, and very practical guidance. "
Anusha Sharma
Partner, Professional Services Firm
" Their team quickly identified compliance gaps and suggested actionable fixes. Reporting was crisp and easy for management to understand. "
Rohit Kulkarni
CFO, Manufacturing Unit
" We got strong process recommendations and control improvements. The audit insights genuinely helped us reduce leakage and improve discipline. "
Meghana Rao
Director, Startup
" Professional, responsive, and very transparent. They explained everything in simple terms and kept the entire process on schedule. "
Imran Khan
Owner, Hospitality Business
" The team ensured our documentation was audit-ready and supported us throughout. Great experience and strong attention to detail. "

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