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Labour License (CLRA)

Secure legal approval to supply contract workers. We manage Form III procurement from clients, online applications with the state Labour Department, and license renewals.

What is a Contract Labour License?

Under the Contract Labour (Regulation and Abolition) Act of 1970 (CLRA), any contractor who employs 20 or more contract workers (10 or more in states like West Bengal and Bihar) on any day of the preceding 12 months must secure a valid Labour License. Similarly, the Principal Employer (the client organization hiring the contractor) must hold a Principal Employer Registration Certificate (RC) to legally engage contractor staff.

Principal Employer vs. Contractor Requirements

  • Registration Certificate (RC): Procured by the Principal Employer (the factory, corporate office, or institution) to allow outsourcing of services.
  • Contractor Labour License: Secured by the Contractor (the security agency, housekeeping company, or manpower vendor) to supply workers to a specific client site. A separate license is required for each separate client site.

The Crucial Role of Form III

A contractor cannot apply for a Labour License independently. The client (Principal Employer) must issue a Form V / Form III (Certificate of Employment). This document certifies that the principal employer is registered under the CLRA Act and has authorized the contractor to deploy a specific number of workers for a defined period. Filengro coordinates with your client's compliance team to procure this certificate without friction.

Documents Required for Labour License Application

  • Form V / Form III issued by the Principal Employer
  • PAN and Aadhaar Card of the Contractor / Proprietor
  • Certificate of Incorporation, Partnership Deed, or Trade License
  • EPF Registration Certificate and latest payment challan
  • ESI Registration Certificate and latest payment challan
  • Treasury Challan demonstrating payment of state licensing fees
  • Security deposit challan (reimbursable after contract completion)

Filing Steps & Timelines

The entire licensing process is conducted online through the central Shram Suvidha portal or state-specific labor portals:

  1. Form V Procurement: We coordinate with your client to obtain the signed Form V/Form III.
  2. Profile Setup: We register your business on the respective state labour department portal and map your credentials.
  3. Application Submission: We draft and upload the Form VI application, attach documents, and calculate the license and security fees.
  4. Fee Payment: You pay the calculated fees via the online treasury portal.
  5. Scrutiny & Issuance: The licensing officer reviews the documents. Upon approval, the digital Contract Labour License is issued.

Ongoing Compliances

Once a license is issued, the contractor must maintain specific statutory registers at the worksite, including registers of wages, muster rolls, overtime records, and deduction sheets. Contractors must also submit Half-Yearly Returns (Form XXIV) to the licensing officer within 30 days of the end of the half-year. Filengro provides ongoing retainer services to manage these registers and returns, protecting you from audit failures.

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