Contractor Labour Act’1970

Contract Labour Act’1970

This act has been enacted to regulate the employment of contract labour in certain establishments and to provide for its abolition in certain circumstances and for matters connected therewith. It applies to all establishments employing 20 or more contract labour and to all contractors who employs 20 or more contract labours.

How Does the Contractor Labour Act 1970 Work?

This act has been enacted to direct the work of contract labor in certain foundations, to provide for its abrogation in certain circumstances, and for things associated therewith.

It aims to prevent the misuse of contract labor and, moreover, present better working conditions. It extends to the entire India.


  • To any establishment in which twenty or more laborers are utilized on any day of the bookkeeping year as contract labor.
  • To any contractor who employs or who employs twenty or more workers on any day of the bookkeeping year.
  • Also, it does not apply to the establishments if any work is performed in an irregular manner.
  • It does not apply to establishments arranged in the special financial zone (SEZ).

Salient Highlights of the Act

Any business that intends to hire contract workers must get a certificate of enrollment from the appropriate government agency.

Every contractor who has utilized twenty or more specialists on any day of the month has to get a permit for locks in contract labor working for any establishment.

The allowed permit will be substantial for the indicated period and may be renewed from time to time.

Payment of Wages

  • It is the responsibility of the temporary worker to pay the required compensation to each laborer utilized under contract labor some time after the termination of the stipulated period.
  • If the temporary worker fails to make the installment within the stipulated period, at that point the principal boss should be at risk of making the installment of wages in full or the unpaid adjustment due.
  • The wages are to be settled by the Commissioner of Labor.
  • For repudiation of the arrangements of the Act or any rules made thereunder, the discipline is detention for a maximum term of up to 3 months and pouring up to a maximum of Rs. 1000/-.
  • The Act provides for the structure of Central and State Advisory Boards to prompt the concerned governments on things emerging out of the organization of the Act. 
  • The central or state government, after discussion with the fitting counseling boards, may disallow the business of contract labor in any process, operation, or other work in any foundation.

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