Labour License Registration in India is a mandatory legal requirement for establishments employing contract labour beyond the prescribed limit. It is governed under the Contract Labour (Regulation and Abolition) Act, 1970 (CLRA Act) to ensure proper working conditions, wages, and welfare of contract workers.
In this Saving Mantra guide, we explain what a labour license is and the step-by-step process for Labour License Registration in India, along with eligibility, documents, and compliance requirements.
What is a Labour License?
A Labour License is an approval issued by the Labour Department to contractors or employers engaging contract labour. It authorizes the contractor to employ a specific number of workers for a particular establishment or project.
Who Needs Labour License Registration?
Labour License registration is mandatory for:
- Contractors employing 20 or more contract workers
- Employers engaging contractors for manpower supply
- Construction, manufacturing, and infrastructure projects
- Service-based industries using contractual manpower
Benefits of Labour License Registration
- Legal authorization to hire contract labour
- Compliance with labour laws
- Protection against penalties and prosecution
- Improved credibility with clients and authorities
- Ensures welfare and safety of workers
Step-by-Step Process for Labour License Registration in India
Step 1: Registration of Establishment
The principal employer must first obtain Establishment Registration under the Contract Labour Act from the Labour Department.
Step 2: Obtain Form V (Principal Employer Certificate)
The contractor must obtain Form V from the principal employer authorizing engagement of contract labour.
Step 3: Prepare Required Documents
Collect all documents related to contractor, establishment, and manpower details.
Step 4: File Labour License Application
Submit the labour license application online or offline (as per state rules) to the Labour Department.
Step 5: Pay Government Fees & Security Deposit
Pay the prescribed license fee and security deposit, which depends on the number of workers employed.
Step 6: Verification by Labour Authority
The Labour Officer verifies the application and documents. Site inspection may be conducted if required.
Step 7: Issue of Labour License
After successful verification, the Labour License Certificate is issued specifying the number of workers and validity period.
Documents Required for Labour License Registration
- PAN Card of contractor
- Business registration proof
- Establishment registration certificate
- Form V issued by principal employer
- Identity & address proof
- Agreement between contractor and employer
- List of contract workers
- Challans for fee and security deposit
(Document requirements may vary by state)
Validity and Renewal of Labour License
- Labour License is generally valid for 1 year or project duration
- Renewal must be applied before expiry to avoid penalties
Post Labour License Compliance
- Payment of minimum wages
- Timely salary disbursement
- Maintenance of labour registers
- Compliance with PF, ESI, and safety laws
- Submission of periodic returns
Penalty for Operating Without Labour License
Failure to obtain a labour license may result in:
- Heavy fines
- Cancellation of contracts
- Legal prosecution
- Blacklisting by government departments
Why Choose Saving Mantra for Labour License Registration?
- State-wise labour law expertise
- Accurate documentation and filing
- Transparent and affordable pricing
- Fast turnaround time
- End-to-end labour compliance support
Conclusion
Labour License Registration in India is a crucial compliance requirement for businesses engaging contract workers. By following the correct step-by-step labour license registration process, employers and contractors can operate legally, avoid penalties, and ensure worker welfare. Saving Mantra provides a smooth, compliant, and professional labour license registration experience.
Disclaimer
The information provided in this blog is for general informational purposes only and does not constitute legal or professional advice. Labour laws, thresholds, fees, and procedures vary by state and may change from time to time. Readers are advised to consult qualified professionals before applying for Labour License Registration or engaging contract labour.