Does a contractor need a licence to supply 50 workers in Tamil Nadu?
Short answer
Yes. Under the Occupational Safety, Health and Working Conditions Code, in force since 21 November 2025, a contractor engaging 50 or more contract workers needs a licence before supplying them. The old Contract Labour Act set the limit at 20. The principal employer also has duties, so ask any agency for its licence copy before signing.
What changed from the old Contract Labour Act?
| Point | Old law (CLRA Act, 1970) | OSH Code, 2020 (from 21 Nov 2025) |
|---|---|---|
| Licence threshold | 20 or more contract workers | 50 or more contract workers |
| Counting | Per establishment | Any day in the preceding 12 months; commentators read it as cumulative across a contractor's sites |
| Existing licences | n/a | Saved and carried over |
| Core activities | Abolition by notification | Section 57 restricts contract labour in core activities, with listed exceptions |
What does the principal employer have to do?
Check the contractor's licence and registration before work starts, keep copies, and make sure wages and statutory dues are paid on time. If the contractor defaults on wages or contributions, the principal employer can be held liable and may recover the amount from the contractor. Monthly proof of payment protects you.
See the documents to collect every month.
Can contract workers do core work?
Section 57 of the OSH Code restricts contract labour in an establishment's core activities. Exceptions include work normally done through contractors, work that does not need full-time workers for most of the day, and sudden increases in volume that must be finished in a set time. Check how this applies to your unit with a labour-law adviser.