Who counts as contract labour
A worker is contract labour when they are hired in or in connection with the work of an establishment by a contractor, with or without the knowledge of the principal employer. The test is who pays, supervises and can remove the worker. A guard posted at your gate by a security agency, a housekeeper supplied by a facility company, or a loader from a labour contractor are all contract labour of your establishment even though their payslip carries the contractor's name.
Employees on fixed-term contracts signed directly with you are not contract labour; they are direct employees on limited tenure. The word 'contract' confuses people here, and the distinction matters because the registers and liabilities are completely different.
Thresholds and registration in India
Under the 1970 Act, the establishment needed a registration certificate and the contractor needed a licence once 20 or more contract workers were engaged. The OSH and Working Conditions Code 2020, in force since 21 November 2025, moves that threshold to 50 contract workers for licence and registration. Rules are still being notified state by state, so older Act provisions continue to apply where the new rules are not yet in force; confirm the position with your state labour department before dropping any filing.
Whatever the threshold, the record-keeping does not change: a register of contractors at the principal employer, and a muster roll, wage register and wage slips at the contractor. Inspectors check that the contractor's muster roll matches the gate register and the attendance actually recorded at site.
- Register of contractors (Form XII under the 1970 rules) maintained by the establishment.
- Contractor's licence displayed at the site, with the number of workers it permits.
- Muster roll, wage register, overtime register and wage slips for every contract worker.
- Wages paid in the presence of an authorised representative of the principal employer, who certifies the wage register.
Why attendance is the control point
Every liability in contract labour flows from days worked. If the contractor under-pays minimum wages or defaults on PF or ESI, the principal employer must pay and recover later. The only defence is a clean, independently recorded attendance trail that shows how many workers were present on each day and for how many hours, so you can check the contractor's invoice and statutory challans against reality.
This is why most disputes trace back to a gate register that the contractor's supervisor fills in, an Excel sheet nobody reconciles, and a bill that quietly adds a few ghost workers. Our guide on contract labour compliance for principal employers covers the monthly reconciliation routine.
A mall engages a facility contractor who deploys 60 housekeeping workers in two shifts (07:00–15:00 and 15:00–23:00). At 60 workers the site crosses the 50-worker OSH Code threshold, so the mall needs registration and the contractor needs a licence. The mall's operations team records attendance with selfie and GPS at the service entrance, and each month compares 60 workers x 26 days = 1,560 expected man-days against the contractor's wage register before clearing the bill and the PF ECR copy.
Attend Mitra lets a principal employer record contract workers site-wise with face, selfie or GPS attendance, tag them to their contractor, and export a monthly muster roll and man-day summary per contractor. That gives you an independent attendance record to certify the contractor's wage register and to check PF and ESI challans before releasing payment.