LABOUR LICENSE REGISTRATION IN INDIA

CONTRACT LABOUR (Regulation and Abolition) Act, 1970

INTRODUCTION

A labor license, also known as a work permit or labor permit, is a legal document issued by a government authority that grants permission to an individual or organization to engage in specific types of employment or business activities.

The issuance of labor licenses is often regulated by labor laws and government agencies to ensure that employers comply with labor standards, protect workers' rights, and regulate the labor market. These licenses may vary depending on the jurisdiction and the type of work being performed.

Typically, labor licenses may be required for various types of employment, such as operating certain types of businesses, working in specific industries (like construction or healthcare), or employing foreign workers.

APPLICABILITY

The importance of labour license for contractors can be seen in the The Contract Labour (Regulation and Abolition) 1970 Act, it applies to any establishment in which twenty or more workmen are employed on any day of the accounting year as contract labour

It applies to any contractor who employs or who employs twenty or more workers on any day of the accounting year. Or in simpler words any contractor having 20 or more than 20 labourers working under him, has to apply for “Labour License”. Recently in Bihar the limit of the working labourers has been increased from 20 to 50.

THERE ARE TWO WAYS IN WHICH YOU CAN APPLY FOR ANY LABOUR LICENSE REGISTRATION I INDIA

PROCESS OF ONLINE LABOUR LICENSE REGISTRATION IN INDIA

  • ONLINE MODE: You can apply for a Labour license by registering yourself at the official web portal of the Labour department of your state. After registering, you’ll be able to apply for the license under the “contractor registration” tab. Make sure that you have scanned copies of all the required documents
  • OFFLINE MODE: You can apply for the Labour license offline by reaching out to the head Labour office of your state. Look out for specially appointed clerks to help contractors register for a permit in the office.

LABOUR LICENSE REGISTRATION PROCESS:

1. The employer should go to the Registrar Office and fill up the application in Form No I and along with the receipt representing payment of the prescribed fee.

2. If the application for registration is fulfilled in all aspects, the authorized personnel shall register the establishment and grant the copy of the registration certificate in Form-II.

Every certificate of registration will display the following;

  • The name and address of the company
  • The maximum number of workers to be contracted as contract labour in the establishment.
  • The type and nature of business.
  • Other important information, if any.

PROCEDURE FOR GRANT OF LICENSE:

  1. The contractor has to apply to the Licensing Authority along with the application for the grant of a license in Form no. IV
  2. A security fee of Rs. 20 has to be deposited at the time of application.
  3. The receipt of the fee paid to the licensing officer has to be kept.
  4. A certificate by the employer in Form V stating that he has employed the respective contractor for his company.
  5. The licensing officer may make further necessary verifications and grant the license in Form VI, which has to be renewed before 30 days of the expiry date along with the prescribed fee, failing which the contractor will have to pay 25% more fee than the original amount.

DOCUMENTS REQUIRED FOR LABOUR LICENSE

  • KYC DOCUMENTS OF THE OWNER/ PARTNERS/ DIRECTORS
  • KYC DOCUMENTS OF THE FIRMS/NGO/COMPANY
  • CHARACTER CERIFICATE BY SP OFFICE
  • ADDRESS PROOF OF THE REGISTERED OFFICE
  • COPY OF MUNCIPAN TAX RECEIPT
  • PICTURE OF SHOP/OFFICE/PREMISE
  • FORM 5 AND WORK ORDER ISSUED BY PRINCIPAL EMPLOYER

Since the required documents vary from state to state due to the nature of work and other formalities, you should also prepare the documents given below–

  • Copy of the report showing the legal status of the Firm
  • Photograph of the document showing allotment of PF Code no.
  • Copy of receipt/cover note/Insurance policy received.
  • Copy of challans showing remittance of security deposit.
  • The License fee to receive the labour license.

OBTAINING A LABOR LICENSE, OFTEN REFERRED TO AS A BUSINESS OR EMPLOYMENT LICENSE, CAN OFFER SEVERAL BENEFITS TO BOTH EMPLOYERS AND LABORERS:

Professional Development: Licensed employers may invest more in training and professional development opportunities for their employees, leading to enhanced skills and career advancement prospects.

VALIDITY OF LABOUR LICENSE:

There are two type of labour license issues, one for the Petty contractor and ither from the principal contractor. The petty contractor has to renew his license every year, but in the case of the principal contractor, the validity of the license is till the completion of the project,

RENEWABLE OF LICENSE

Procedure for renewal of the license is mentioned below:

  • The contractor is required to approach the Licensing authority before 30 days of the expiry date of the license along with the application for the renewal of license in Form VII with multiple copies.
  • The required fee has to be remitted by the applicant. If the applicant fails to renew the license within the specified date then the contractor will have to pay a fee of 25% more than the original fee payable.

EFFECT OF NON-REGISTRATION:

In case an establishment or a company required to be registered under Section 7, has not been recorded within the time specified for the purpose under that section, then the penalty will be given as per section 36.

BENEFITS TO EMPLOYERS:

  1. Legal Compliance: Having a labor license ensures that the employer complies with local, state, and national regulations regarding employment practices, ensuring the business operates legally
  2. Avoiding Penalties: Operating without a proper labor license can result in fines, penalties, or legal actions. Having the license mitigates these risks
  3. Enhanced Reputation: Employers with proper licenses demonstrate their commitment to following ethical and legal standards, enhancing their reputation among customers, partners, and potential employees.
  4. Access to Contracts: Some contracts or partnerships may require proof of legal compliance, including possessing necessary licenses. Having a labor license can facilitate access to such opportunities.
  5. Employee Retention: Compliance with labor laws and regulations, ensured by having a labor license, fosters a positive work environment, which can contribute to employee satisfaction and retention.

BENEFITS TO THE LABOURS:

  1. Legal Protection: Laborers working for licensed employers are more likely to be protected by labor laws and regulations, ensuring fair treatment, wages, and working conditions.
  2. Health and Safety: Licensed employers are more likely to adhere to health and safety standards, providing a safer working environment for their employees.
  3. Access to Benefits: Laborers working for licensed employers may have access to benefits such as healthcare, retirement plans, and other employee perks, which contribute to their overall well-being.
  4. Dispute Resolution: In the event of disputes or conflicts, laborers working for licensed employers have avenues for legal recourse and resolution, protecting their rights and interests.

FAQS FOR LABOUR LICENSE IN INDIA

Q. What is a suitable website for obtaining a labor license in India?

SHRAM SUVIDHA PORTAL

Q. Who is eligible for a labor license?

Every contractor who has employed twenty or more workers on any day of the month has to obtain a license for engaging contract labour working for any establishment.

Q. What are the fees for applying for labour license?

For 20 Contract Workmen - Rs. 15,
For 21 or more Workmen but less than 50 Rs. 37.50,
For 51 or more Workmen but less than 100 Rs. 75,
For 101 or more Workmen but less than 200 Rs. 150,
For 201 or more Workmen but less than 400 Rs. 300,
For 401 and above Rs. 375.00

Q. What is the benefit of labour license?

It provides legal protection and other benefits to the workers. Also support in economic growth and development.

Q. What are the working hours according to labour law?

An adult (over 18 year) connot work for more than 48 hours in a week and not more than 9 hours in a day

Q. What is the responsibility of principal labour employer under contract labour Act?

Ensure about the timely payment of wages to contract labour is the major duty of the contract labour.

Q. Calculation of salary under labour law?

He basic pay is usually 40% of the gross income or 50% of an individual CTC
BASIC PAY= GROSS PAY-TOTAL ALLOWANCE

Q. Which form should be filled for registration of labour license?

FORM no. IV

Q. What is the time Period for renewable of labour license?

The contractor is required to approach the licensing authority before 30 days of the expiry date of the license.

Q. What are the consequences of non-renewable of labour licenses in limited period?

If fails to renewed the license within the specified time then the contractor will have to pay fee 25% or more than the original fee payable

Q. Is it applying on the companies located in special economic zone (SEZ)?

NO

Q. Advisory board under the contract labout Act?

  1. Central Advisory Board
  2. State Advisory Board
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