Updated on September 01, 2025 11:33:58 AM
In Karnataka, any contractor or business that hires 20 or more contract workers annually must have a labor contractor license. According to the Contract Labour (Regulation & Abolition) Act, 1970 (CLRA Act), this license guarantees that companies maintain the rights of contract workers in sectors such as manufacturing, services, and construction, pay fair wages, and adhere to labor laws.
The CLRA Act requires the contractor (the person or organization providing workers) to obtain a license under Section 12 and the principal employer (the business or establishment using contract labor) to register their business under Section 7. In Karnataka, it is unlawful to hire contract workers without these registrations, and doing so may result in fines or other legal repercussions.
The Karnataka Labour Department's portal allows applicants to apply for a labour contractor licence online, which streamlines and expedites the process. In addition to paying the relevant government fees and a refundable security deposit per employee, contractors and employers are required to provide documentation such as identification proof, a certificate of company registration, labor contract details, worker information, and photographs.
In addition to maintaining legal compliance, having a current company labor contract license guarantees efficient personnel management and enhances a company's reputation with customers and government regulators. Additionally, it ensures that contract workers are paid fairly and have safe working conditions.
A labor contractor license is required of any company or contractor that hires individuals under contract for a project or business. It is issued under the Contract Labour (Regulation and Abolition) CLRA Act, 1970, and ensures that companies handle contract workers following applicable labor regulations. A company or contractor that hires 20 or more contract workers per year needs to obtain this license in order to operate legally in India.
The license ensures that workers obtain fair wages, safe working conditions, and all other legal benefits while protecting the company from penalties or legal problems. It also assists businesses in establishing a reputation and maintaining smooth operations free from legal oversight.
Businesses can now register for a labor contractor license more easily and quickly from any place, thanks to online registration for contract labor licenses.
A labor contractor license is required for any contractor, business, or company that hires 20 or more contract workers per year for any project, site, or business activity. This license ensures that businesses manage their workforces under labor laws and was granted under the Contract Labour (Regulation & Abolition) CLRA Act of 1970.
Industries that include manufacturing, construction, cleaning, security, and event planning commonly use contract workers. Any contractor or company in these industries must obtain a Company Labour Contract Licence to operate legally. This license safeguards firms from penalties and legal problems while defending employees' rights by ensuring fair compensation, safe working conditions, and on-time payments.
To apply for a Labour Contractor License in Karnataka, you need to submit the following documents during contract labour licence online registration:
The online registration process for a contract labour license in Karnataka has made it easier to apply for a labour contractor license. Under the Contract Labour (Regulation & Abolition) Act of 1970, any contractor or company that employs 20 or more contract workers is required to obtain a Company Labour Contract Licence. Here’s how you can apply:
Register your establishment with the local labour department, if not already registered.
Visit the official state labour department portal and select the option for Contract Labour Licence Registration.
Fill out the application form (Form IV) with accurate details about the contractor, principal employer, and workers.
Upload required documents – identity proof, address proof, contract copy, worker details, and challan.
Pay the prescribed government fees and security deposit online as per the number of workers.
Submit the application and download the acknowledgment receipt.
Once verified, the labour department will issue the Labour Contractor License online.
The fees for a Labour Contractor License in Karnataka depend on how many workers you hire. As per the Contract Labour (Regulation & Abolition) Act, 1970 (CLRA Act), charges vary based on the number of workers and whether you are applying for a State or Central license.
| Workers | Contract Labour Govt. Fee ₹ | State Establishment Registration Fee ₹ | Central Establishment Registration Fee ₹ |
|---|---|---|---|
| 0 - 50 | ₹ 37.50 | NA | ₹ 150 |
| 51 - 100 | ₹ 150 | ₹ 1,800 | ₹ 300 |
| 101 - 200 | ₹ 300 | ₹ 4,800 | ₹ 600 |
| 201 - 400 | ₹ 300 | ₹ 7,200 | ₹ 1,200 |
| 400 - 800 | ₹ 375 | ₹ 9,000 | ₹ 1,500 |
Note: Professional Fee for Labour Contractor License in Karnataka starts from @5,000.
The aforementioned fees are exclusive of GST.
In Karnataka, contractors and businesses with 20 or more contract workers must obtain a labor contractor license. Section 7 of the Contract Labour (Regulation & Abolition) Act, 1970 (CLRA Act) requires the principal employer to register their business, and Section 12 requires the contractor to obtain a license. The registration process is now quick and easy thanks to the Karnataka Labour Department's web portal. Businesses can legally hire workers, avoid fines, and guarantee equitable treatment and compensation for their employees by submitting the necessary paperwork, paying the government fees, and depositing a refundable security amount.
At Professional Utilities, we leverage our industry knowledge and expertise to help businesses navigate complex regulations, minimize risks, and optimize operations for maximum efficiency and profitability.
According to the CLRA Act, any contractor or business that hires 20 or more contract workers in a year needs to get a license.
The Contract Labour (Regulation & Abolition) Act of 1970 governs the license.
While Section 12 is for labor-supplying contractors, Section 7 is for principal employers registering their business.
Applying online, submitting paperwork, and paying the fee and security deposit are all possible through the Karnataka Labour Department's website.
Required documents include identification, business registration, employee information, a contract, photos, and a fee challan.
If all the paperwork is in order, the license is typically granted in 7–15 working days.
Along with a refundable security deposit, the cost is contingent on the number of employees and whether you are a principal employer or a contractor.
Operating without a license can result in severe fines, legal action, and a prohibition on conducting business.
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