CLRA Registration and Licensing

Manish Kumar 10 Nov 2025 1,092 Views 0 comment Print Corporate Law | Articles

Overview of CLRA Registration and Licensing

The Contract Labour (Regulation and Abolition) Act 1970 was enacted in 1970. This Act was enacted to prohibit the employment of contract workers in certain circumstances and to regulate the working conditions of these contract workers during the period of their employment. Every employer who employs contract workers for their work needs to obtain CLRA registration and a license from the appropriate authority.

This Act applies to:

Any establishment that employs twenty or more workers as contract labour on any day of the financial year
Any contractor who employs or employs twenty or more workers on any day of the financial year

This Act does not apply to:

It does not apply to any establishment that operates intermittently.
It does not apply to any establishment that has not carried on any work for more than 21 days in a year.
It does not apply to any establishment located in a Special Economic Zone.
It does not apply to any establishment if it carries out any work of a seasonal nature for more than sixty days in a year.

Benefits of CLRA Registration and Licensing

Compliance with law: The Contract Labour (Regulation and Abolition) Act, 1970 (CLRA Act) is a law that regulates the employment of contract labour in India. By registering under CLRA, you ensure that you comply with the law and avoid penalties and legal complications.
Protection of rights of contract workers: CLRA sets out certain rights for contract workers, such as the right to fair wages, the right to rest and leisure, and the right to safety and health. By registering under the CLRA, you are helping to ensure that these rights are protected.
Access to government benefits and schemes: There are many government benefits and schemes available to registered establishments. By registering under CLRA, you may be eligible for these benefits.
Lower Risk of Penalties: If you are found to violate the CLRA, you may be subject to fines, imprisonment, or other penalties. By registering under the CLRA, you can help reduce your risk of these penalties.
Improved brand image: By registering under CLRA, you demonstrate your commitment towards compliance with the law and the welfare of your workers. This can improve your brand image and make you more attractive to customers and investors.
Increased Efficiency: By registering under CLRA, you will have to maintain certain records and registers. Ensuring that you have accurate records of your workforce and their working hour can help you improve the efficiency of your operations.
Lower Liability: By registering under CLRA, you can reduce your liability in the event of an accident or injury to a contract employee. This is because the CLRA sets certain standards regarding safety and health that you must meet.

Eligibility of CLRA Registration and Licensing

The establishment must employ 20 or more contract labourers on any day of the financial year.
The establishment must be located in India.
The establishment must be engaged in any industry, manufacture, profession, trade or business listed in the CLRA Act Schedule.
The establishment should not be a government establishment.

Documents Required for CLRA Registration and Licensing

Documents required for registration

The documents required for registration of Principal Employer under the Contract Labour (Regulation and Abolition) Act are as followsValidid business license

AOA and MOA or Partnership Deed
Factory license
Other certificates of registration in case of any entity other than a company, proprietorship or partnership firm
Any other required document

Documents required for a license

The list of documents required for licensing of contractors under the Contract Labour (Regulation and Abolition) Act is as follows:

Form V
Valid work order
Business license
Any other required document

Compliance Related to CLRA Registration and Licensing

Compliances related to CLRA registration and licensing are:

Registration with the appropriate government authority: The principal employer must be registered with the appropriate government authority in the state where the establishment is located. The registration process can be done online or offline.
Providing facilities to contract workers: The main employer has to provide facilities like e-canteen, toilet and crèche to the contract workers. The type and number of facilities required will depend on the number of contract workers employed by the establishment.
Paying fair wages and overtime to contract workers: The principal employer must pay fair wages and overtime to contract workers. The salary should be at least equal to the minimum wage set by the government.
Ensuring the safety and health of contract workers: The principal employer must ensure the safety and health of the contract workers. This includes providing them with safety equipment and training and ensuring that the work environment is safe.
Compliance with other requirements of the CLRA Act: The principal employer must comply with other requirements of the CLRA Act, such as maintaining registers and records and filing returns.

Penalties of CLRA Registration and License

Failure to obtain registration and license: Any principal employer who fails to obtain registration and license to employ contract labour shall be punished with imprisonment of either description for a term which may extend to three months, or with a fine which may extend to one thousand rupees, or with both.
Employing contract workers in prohibited establishments: Any principal employer who employs contract workers in any establishment where the employment of contract workers is prohibited shall be punished with imprisonment of either description for a term which may extend to six months, or with a fine which may extend to two thousand rupees, or with both.
Breach of any condition of registration or licence: Any principal employer or contractor who contravenes any condition of registration or license granted under the CLRA Act shall be punished with imprisonment of either description for a term which may extend to three months, or with a fine which may extend to one thousand rupees, or with both.
Willful neglect of the provisions of the Act: Any principal employer or contractor who willfully neglects to comply with any provision of the CLRA Act shall be punished with imprisonment of either description for a term which may extend to six months, or with a fine which may extend to two thousand rupees, or with both.