Under the Contract Labour Act, maintaining strict Contract Labour Compliance is essential to avoid legal repercussions. The Contract Labour (Regulation & Abolition) Act 1971 outlines specific criteria for its applicability. This statutory compliance is relevant to two main categories:

A) Establishments with 20 or More Workmen:

Applies to every establishment where 20 or more workmen are employed or were employed on any day of the preceding 12 months as contract labour.

B) Contractors with 20 or More Workmen:

Applies to every contractor who employs or who employed on any day of the preceding 12 months 20 or more workmen.

Additionally, the CLRA Act does not apply to establishments where work is of an intermittent or casual nature. Work is deemed intermittent if performed for less than 120 days in the preceding 12 months or is of non-seasonal nature and performed for less than 60 days in a year.

Contract Labour Compliance Requirements under CLRA Act

To adhere to the provisions of the Contract Labour (Regulation & Abolition) Act, 1971, several compliance measures are mandated:

A) Half-Yearly Returns by Contractors:

Contractors are required to submit Half-Yearly Returns on 30th July for the period of Jan-June and 30th January for the period of July-Dec. The submission should be in Form No. XXIV.

B) Annual Return by Principal Employer:

The Principal Employer must send the Annual Return on 15th February for the period of Jan-December, using Form No. XXV, to the Registering Officer.

C) Submission of Return for Commencement or Completion of Contract:

The Principal Employer must, within 15 days of commencement or completion of each contract, submit a return in Form No. VI-B to the Inspector.

D) Registration and Licencing Requirements:

The Principal Employer is obligated to obtain a registration certificate for the establishment, while the contractor must obtain a licence or renewed licence.

E) Mandatory Display of Information:

It is mandatory for the Principal Employer to display the Abstract of the Act & Rule, along with other required details.

F) Maintenance of Register of Contractors:

The Principal Employer is responsible for maintaining a register of contractors in Form No. XII.

G) Minimum Wages Compliance:

The Principal Employer must ensure the payment of minimum wages to the Contract Labour.

H) Provision of Facilities for Workers:

Facilities such as Canteen, Rest Room, Drinking Water, Latrines, Washing Facilities, Urinals, and First Aid Box are required to be provided to the workers.

I) Compliance with Ease of Compliance Rules:

Common Registers, as specified in Forms A, B, C, and D, are to be maintained either electronically or otherwise, as per the Ease of Compliance Rules. These forms replace Form XIII, XVI, XVII, XX, XXI, XXII, & XXIII as per the CLRA Act.

Penalty for Non-Compliance under CLRA Act

In cases of non-compliance with the Contract Labour (Regulation & Abolition) Act, 1971, the following penalties are set:

A) Obstruction of Inspector or Failure to Produce Records:

Obstructing the inspector or failing to produce required registers, etc.

Penalty: Imprisonment of 3 months or a fine up to Rs.500 or both.

B) Violation of Act or Rules:

Any breach of the provisions outlined in the Act or the Rules constitutes a violation.

Penalty: The prescribed penalty for such violations includes imprisonment for a duration of 3 months or a monetary fine, extendable up to Rs.1000.

Continuing Contravention: In instances of persistent contravention, an additional daily fine, not exceeding Rs.100, may be imposed until compliance is achieved.

Comprehensive Contract Labour Compliances Services

Our Contract Labour Compliance services aim to benefit all stakeholders involved in the employment ecosystem, namely the principal employer, contract workforce, and contractor. We are committed to ensuring that your organisation remains compliant with complex details and stays current with evolving regulations.

Given below are the comprehensive range of services offered for compliance in contract labour law:

1. Registration under the CLRA Act:

We facilitate the seamless registration of the principal employer under the Contract Labour (Regulation & Abolition) Act, ensuring adherence to statutory requirements.

2. Licencing Guidance for Contractors:

Providing expert guidance to contractors in obtaining the necessary licences under the CLRA Act, simplifying the compliance process.

3. Comprehensive Compliance Setup:

Handling and ensuring compliance with the Factories Act, The Shops and Commercial Establishment Act (for Service Industry), and Professional Tax Act for the proper establishment of your organisation.

4. Maintenance of Registers, Records, and Returns:

We maintain contractor-wise registers, records, and returns, minimising the administrative burden on your organisation.

5. EPF and ESI Contributions Management:

Efficient handling of EPF and ESI contributions through the employer’s sub code or contractor’s code, ensuring compliance with relevant regulations.

6. Minimum Wage Payment Compliance:

Ensuring adherence to the Minimum Wages Act by implementing effective processes for the calculation and payment of minimum wages to the contract workforce.

7. Handling Sensitive Issues:

Administration of sensitive issues within the organisation, including compliance with the Sexual Harassment Act and Industrial Dispute Act.

8. Coordination of Benefits under Various Acts:

Simplifying coordination for EPF, ESI, LWF (Labour Welfare Fund), and WC (Workmen's Compensation) for Contract Labour Acts, ensuring that your organisation maximises the benefits available under these acts.

Why Choose StartupFino for Contract Labour Compliances?

It is important to recognise that the principal employer carries the bulk of responsibilities for contract labour compliances, and any errors in execution or judgement may lead to consequences for the organisation. StartupFino is a company that specialises in offering complete services on Contract Labour compliances. We can help you with everything from providing advice in the initial phase to ensuring that you meet all the necessary requirements and compliances for your relevant industry.