The Contract Labour (Regulation and Abolition) Act, 1970 regulated the engagement of contract workers, requiring the principal employer to register and the contractor to hold a licence once a worker-count threshold is crossed.

The threshold, and what changed under the new Code

Under the original Act, registration and licensing kicked in at 20 or more contract workmen employed on any day in the preceding 12 months, though several states had already amended their own threshold higher, up to 50 in some cases, well before any national change. This Act has since been folded into the OSH Code, 2020, which raises the national threshold to 50 or more contract workmen. Given the ongoing state-level rollout of the labour codes through 2026, employers should verify their specific state’s current applicable threshold, some states may still be operating under the legacy 20-worker regime until their own OSH Code rules are fully notified. Contract labour under this framework specifically means workers supplied by a contractor to do work of the principal employer’s own establishment, a distinct category from gig or platform workers.

Frequently asked questions

Is 20 or 50 the correct current threshold?

It depends on your state’s rollout status, the national threshold under the OSH Code is 50, but confirm your specific state hasn’t retained a different figure during the transition.

Does this Act cover gig workers?

No, gig and platform workers are a separately defined category, addressed mainly under the Code on Social Security, not this framework.

Who is legally responsible, the principal employer or the contractor?

Both carry distinct obligations, the contractor needs a licence, the principal employer needs registration, and liability isn’t fully offloaded to one side.

See the OSH Code that absorbed this Act.