Licence vs Registration: What's the Difference?

The direct rule: two obligations, two parties

Under the Occupational Safety, Health and Working Conditions Code, 2020, Chapter XI, Part I, contract labour is governed by two separate compliances. The principal employer (the client company that engages contract labour) registers its establishment. The contractor (you, the manpower or staffing firm) must hold a licence. Section 47 states that no contractor to whom this Part applies shall supply or engage contract labour in any establishment, or undertake or execute work through contract labour, except under and in accordance with a licence issued by the licensing authority. In plain terms: registration answers whether the client may lawfully use contract labour, and the licence answers whether you may lawfully supply or engage it.

The governing provision for the licence

Section 47 (Licensing of contractors) is the source of your licence duty. The licence specifies the number of contract labour who can be supplied or engaged and the amount of security deposit to be deposited (s47(1)). Applications are made electronically (s48). A licence issued for the purposes of s47(1) is valid for five years in respect of the number of contract labour specified (s48(3)), and if you want to increase that number you apply to amend the licence and deposit the additional security for the balance period. Where a contractor does not meet the requisite qualifications or criteria, the authority may issue an electronically renewable work-specific licence to supply or engage contract labour only for the concerned work order (s47(2)). The principal employer's registration is the parallel obligation on the client side under the Code and the rules.

The threshold that usually decides applicability

Chapter XI, Part I applies to every establishment in which 50 or more contract labour are employed, or were employed on any day of the preceding 12 months through contract, and to every manpower supply contractor who has employed 50 or more contract labour on any day of the preceding 12 months (s45(1)). It does not apply where the work is only of an intermittent or casual nature (s45(2)). Under the earlier Contract Labour (Regulation and Abolition) Act, 1970, the applicability threshold was 20 or more contract workmen; the OSH Code is widely reported to have raised it to 50, but state thresholds vary and you must check the threshold notified under your state's rule. Note the wording: because the test counts any day of the preceding 12 months, a firm that only briefly crossed the count in the last year is still caught.

Why registration and licence are linked (the backstop)

The two obligations are connected, so a staffing firm cannot ignore the client side. Under s54, where a principal employer engages contract labour through a contractor who is required to obtain a licence but has not obtained one, that employment is deemed to be a contravention of the Code. That is why serious clients will not onboard an unlicenced supplier: the missing licence exposes them. A separate licence is generally required for each principal employer (the legacy CLRA position carried into the rules; confirm against your state's notified rule). If you wish to supply or engage contract labour in more than one state or for the whole of India, you may obtain the licence from the authority designated by the Central Government, which then consults the concerned state authorities (s47, provisos).

Forms and the action step

In the CLRA framework carried into the rules, the forms map to the two parties: Form I is the principal employer's registration, Form IV is the contractor's licence application, Form V is the certificate the principal employer issues to the contractor, and Form VI is the licence itself. Confirm the exact form numbers against your state's notified rules before filing, because these can be re-numbered. Action step for a manpower firm: (1) take your peak contract-labour headcount over the last 12 months and compare it against the threshold notified in your state; (2) if you are caught, apply for your contractor licence (from the state authority, or from the Central authority for multi-state or pan-India supply); (3) obtain a Form V type certificate from each principal employer and file a separate licence application per client; (4) keep the licence current within its five-year validity and amend it before you increase the sanctioned headcount (s48(3)).

Sources, last verified and disclaimer

Sources: OSH Code 2020, Chapter XI, Part I (s45, s47, s48, s54) and s119; CLRA 1970 legacy forms as carried into the rules; labour codes in force from 21 November 2025 with Central Rules notified 8 May 2026. Last verified: 2026-09-20. This page is general information for staffing and manpower firm owners and is not legal advice; state-specific fees, thresholds and form numbers must be verified against your state's notified rule. Reviewer status: pending named legal review.

Key points

• Registration is the principal employer's obligation for its establishment; the licence is the contractor's obligation to supply or engage contract labour (OSH Code Chapter XI, Part I).
• Section 47: no covered contractor may supply, engage, or execute work through contract labour except under a valid licence.
• The licence states the number of workers it covers and the security deposit (s47(1)); a licence under s47(1) is valid for five years (s48(3)).
• A work-specific licence (s47(2)) covers only one concerned work order and is for contractors who do not meet the requisite qualifications or criteria.
• Applicability turns on a threshold: OSH Code is widely reported as 50 or more contract labour (s45), CLRA legacy was 20 or more, and state thresholds vary, so verify your state's notified rule.
• A separate licence is generally needed for each principal employer; multi-state or pan-India supply can be licensed by the Central authority (confirm against notified rules).
• Under s54, engaging contract labour from a non-licenced contractor is deemed a contravention of the Code, so the licence is effectively a precondition to winning and keeping client contracts.
• Legacy forms carried into the rules: Form I (principal employer registration), Form IV (contractor licence application), Form V (principal employer certificate), Form VI (licence); confirm the exact numbers against your state's rule.

Related questions

Check for your state

• Exact applicability threshold under the OSH Code and each state's rules (Code widely reported as 50, CLRA legacy was 20): verify against the state's notified rule.
• Exact form numbers and titles under the notified Central and state rules (the legacy CLRA form numbers cited here must be confirmed).
• Licence fees, security deposit amounts, and renewal mechanics: these are set by state notified rules and are not provided in the grounding pack.
• Whether 'a separate licence per principal employer' survives unchanged in every state's notified OSH rules: confirm locally.
• Precise treatment of the principal employer's registration (form and threshold) under the OSH Code, as distinct from the general establishment registration: confirm against notified rules.