A Brief Overview of CLRA Registration & Licensing

In India, ministry of labour & employment is the governing body for making and implementing laws about the same. The prime control of the ministry is to secure the interest of the workforce, enforce employee-friendly laws & ensure compliance by the industry in the country.

These laws provide a regulative environment for problems like minimum wage, occupational safety, accidental & benefits for social security, health, conditions of employment, etc.

CLRA, or contract labour registration act, 1970, is a specific law regulating the utilise employees of your workforce. It issues the guideline based on which the industry controls the terms & conditions for the worker, which an outsourced contractor uses in any specific sector.

The act applies to the following:

  • Any establishment that employs twenty or more workers on any of the financial years as a contract worker
  • Any contractor who used or employed twenty or more workers on any day of the financial year

The act does not apply to the following:

  • It does not apply to any establishment that performs work of an intermittent nature.
  • It does not apply to any establishment that has not performed any work for more than 21 days in years.
  • It does not apply to any establishment situated in the special economic zone.
  • It does not apply to any establishment that has performed any seasonal work for more than sixty days in one year.

How vital is CLRA for the Principle employer & contractor?

The CLRA license relevancy is for the contractor, and the CLRA registration relevancy is for the principal employer. The CLRA act suggests that employing contract labourers in your organisation is unlawful without the above two compulsory requirements. Hence, the leading employer must ensure that the contractor they hire has fulfilled all the obligations by the CLRA license.

What you know as a Principal Employer & Contractor

Notwithstanding whether you have obtained registration under the CLRA, you must be fully aware of the liabilities you carry as part of the CLRA act. The principal employer has to ensure that the contractor entirely takes care of the employee’s welfare, including the availability of restrooms, canteens, drinking water, physical safety, first aid, etc., by the contractor.

If the contractor does not, it falls on the principal employer to make these accessible to the contract employees.

The ministry is accountable for promoting the welfare and security of the workforce in organised and unorganised employment sectors. Each organisation employing contract workers must know this law and ensure compliance.

Compliances related to CLRA Registration and licensing are:

  1. Notice of commencement or completion of contract work Form VI-B
  2. Maintenance of Registers and Records
  3. Register of Contractor Form XII
  4. Register of person Employed Form XIII
  5. Employment Card to each labour within 3 days of employment in Form XIV
  6. Service Certificate on termination of worker Form XV
  7. Muster Roll Form XVI
  8. Register of Wages Form XVII

When should one apply for CLRA registration and licensing?

Any company or principal employer whose work and hiring patterns falls under the criteria of applicability of CLRA needs to apply for CLRA registration. At the same time, the contractor requires a CLRA licence from the appropriate Government for contracting workers to establishments.