Engaging contract labour in India is regulated primarily under the Contract Labour (Regulation and Abolition) Act, 1970. This law aims to regulate the employment of contract workers and protect their rights while ensuring compliance by employers and contractors. Here are the key licensing and compliance requirements for engaging contract labour:

Licensing Requirements:
Obtaining a License:
Any establishment that employs 20 or more contract workers must obtain a license from the appropriate government authority before engaging contract labour. The license is typically granted by the Chief Labour Commissioner or a designated officer.

Application Process:
The contractor must apply in the prescribed form providing details such as the name of the establishment, nature of work, number of contract workers employed, wages paid, and compliance with labour laws.

Validity and Renewal:
Licenses are granted for a specific period and must be renewed before expiry. Operating without a valid license is illegal and can lead to penalties.

Compliance Requirements:
Wage Payment:
The contractor must pay wages to contract workers on time and not less than the minimum wages fixed by the government for the relevant industry or area.

Working Conditions:
The contractor and the principal employer must ensure that contract workers have adequate safety measures, health facilities, and welfare amenities as prescribed under labour laws.

Maintenance of Registers and Records:
Contractors are required to maintain proper registers of employment, wages, attendance, and fines imposed, which must be available for inspection by authorities.

Compliance with Other Labour Laws:
Contract labour and their contractors must adhere to applicable laws, including the Payment of Wages Act, Employees’ Compensation Act, Factories Act, and Employees’ Provident Funds and Miscellaneous Provisions Act.

Principal Employer’s Responsibility:
Although the contractor is the direct employer, the principal employer is responsible for ensuring that the contractor complies with all licensing and labour law provisions. The principal employer may be held liable for violations.

Abolition of Contract Labour:
The Act empowers the government to prohibit the employment of contract labour in any establishment or process where it is feasible to do so, promoting direct employment.