The Contract Labour (Regulation and Abolition) Act, 1970 provides for regulation of the employment of contract labour and its abolition under certain circumstances.


It covers every establishment in which 20 or more workmen are employed on any day of the preceding 12 months as ‘contract labour’ and every contractor who employs or who employed on any day of the preceding 12 months, 20 or more contract employee. It does not apply to establishments where the work is of intermittent and casual nature unless work performed is more than 120 days and 60 days in a year respectively (Section 1).
The Act provides for setting up of Central and State Advisory Contract Labour Boards by the Central and State Governments to advise the respective Governments on matters arising out of the administration of the Act (Section 3 & 4).
The establishments covered under the Act are required to be registered as principal employers with the appropriate authorities. Every contractor is required to obtain a licence and not to undertake or execute any work through contract labour, except under and in accordance with the licence issued in that behalf by the licensing officer. The licence granted is subject to conditions relating to hours of work, fixation of wages and other essential amenities in respect of contract as prescribed in the rules (Section 7 & 12).



The Act has laid down certain amenities to be provided by the contractor to the contract labour for establishment of Canteens and rest rooms; arrangements for sufficient supply of wholesome drinking water, latrines and urinals, washing facilities and first aid facilities have been made obligatory. In case of failure on the part of the contractor to provide these facilities, the Principal Employer is liable to provide the same (Section 16, 17, 18, 19 and 20).

A workman is deemed to be a contract labour when he/she is hired in connection with the work or “contract for service” of an establishment by or through a contractor. They are indirect employees; persons who are hired, supervised and remunerated by a contractor who, in turn is compensated by the establishment.