Contract Labor Act

The Contract Labour Act, 1970 was created to prevent exploitation of contract workers, improve their working conditions, and regulate how contract labor gets employed across certain establishments. A worker counts as contract labor when they’re hired through a contractor rather than directly. The Act applies to any firm employing 20 or more contract laborers, even if that’s only the case for a single day within a 12-month stretch. Central and State advisory boards oversee the Act to keep it functioning as intended.

Where doesn’t it apply?

The Act doesn’t cover work that’s irregular or seasonal in nature. If a firm does fall within the Act’s scope, both employer and contractor need to register the establishment and obtain a license, though the Act does allow for temporary registration in certain cases.