Contract Labour explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Chapters IX and X of the Occupational Safety, Health and Working Conditions (Andhra Pradesh) Rules, 2026 are the working rules for contractors and principal employers: who needs a licence, what the application carries, the fee and security deposit, how the licence is renewed, amended, suspended or revoked, who pays wages, and what an inter-State migrant worker is entitled to.
If you engage contractors in the State, a labour law compliance review of licences and deposits is a practical first step.
The rules are the Occupational Safety, Health and Working Conditions (Andhra Pradesh) Rules, 2026, as notified by G.O.Rt.No.146 dated 6 August 2026. No licence is required up to 49 contract labour; from 50 the fee runs from Rs. 5,000 (50 to 100) upward, "as modified by means of a notification issued by the Government from time to time", and a security deposit of Rs.1000 for each workman is paid before the licence issues (rule 45). Contract wages are paid before the expiry of the seventh day after the wage period (rule 55).
Notification and commencement
The rules are the Occupational Safety, Health and Working Conditions (Andhra Pradesh) Rules, 2026, as notified by G.O.Rt.No.146 dated 6 August 2026. Later amendments and State notifications under these rules should be checked in the State Gazette. Rule 1(3) says they come into force on the date of their final publication in the Official Gazette; the four Labour Codes were brought into force from 21 November 2025. The records chapter is in our article on registers and returns.
Conditions of the licence (rule 42)
The Central rules are rules 85 and 86. The Andhra Pradesh text provides that the contractor ensures hours of work conform to the rules under section 25 and wages are paid in accordance with the Code on Wages, 2019. The contractor informs the authority within fifteen days of receiving a work order. Where contract workers work at the principal employer's premises, the principal employer provides the toilet, washroom, drinking water, bathing facilities if required, changing room, first aid box, canteen and crèche; the contractor provides all other facilities and entitlements. If the contractor fails to pay minimum wages, the principal employer pays and recovers from the contractor by deduction or as a debt (section 55(3) of the Code), and the contract labour can also approach the authority under section 45(1) of the Code on Wages.
The application (rule 43)
The Central rule is rules 87 and 88. The contractor applies for a common licence (factory, beedi and cigar premises, contract workers or a combination) or a single licence in one of them. The application is made online through the Meeseva portal or another notified portal in Form-XIII to the licensing authority, with online payment of the fee in rule 45. It carries an undertaking in Form-XIV that contract labour is not engaged in the core activity, a certificate from the principal employer in Form XV, and the security deposit.
The licence, its conditions and the fee (rules 44 and 45)
- Licence. In Form-XVI. Conditions: non-transferable except on the death of the contractor; the number of contract labour on any day does not exceed the maximum in the licence; fees are non-refundable except as the rules provide; wages not less than the Code on Wages rates or the agreed, settled or awarded rates.
- Security deposit (rule 45(1) and (2)). "Before a license is issued, security deposit calculated at the rate of one thousand rupees (Rs.1000/-) for each of the workmen to be employed as contract labour or inter-state migrant worker", paid through the Meeseva or notified portal; the State prescribes the procedure of deposit, holding and maintenance. On expiry of a licence, the deposit may be adjusted against a new licence at the Licensing Authority's discretion (rule 45(3)).
- Fee (rule 45(4)).
| Contract labour | Fee |
|---|---|
| Up to 49 | No licence required; Nil |
| 50 to 100 | 5,000/- |
| 101 to 200 | 10,000/- |
| 201 to 300 | 15,000/- |
| 301 to 400 | 20,000/- |
| 401 to 500 | 25,000/- |
| 501 to 600 | 30,000/- |
| 601 to 1000 | 40,000/- |
| Above 1000 | 50,000/- |
The fee "shall be as modified by means of a notification issued by the Government from time to time". The licence is valid for one or three financial years, as the case may be (rule 45(5)).
Renewal, refund and amendment (rules 46, 47 and 51)
The Central rule is rules 91 and 92.
- Renewal (rule 46). Application in Form-XIII on the portal at least 30 days before expiry but not earlier than 90 days before it; the security deposit and fee are the same as for the grant, with an additional fee of twenty five percent if the application is not made in time. The authority renews within seven days electronically, failing which the licence is deemed issued and auto-generated.
- Refund (rule 47). On expiry, a contractor who does not want renewal applies electronically for refund of the security deposit with the notice of completion of work. If there is no breach and no forfeiture order, the deposit is refunded; any forfeited amount is deducted. Refund applications are disposed of, as far as possible, within 30 days.
- Amendment (rule 51). Application in Form-XIII within thirty days of the change required, with fee and security deposit. The fee is five hundred rupees plus the amount that would have been payable had the licence been issued originally in the amended form, less the fees already paid; the additional security deposit is Rs.1000 for every worker.
Contractor's responsibilities, work order and single licence (rules 48, 49, 52 and 53)
- Wages and parity (rule 48). Not less than the Code on Wages rates; where contract workers do the same or similar work as the principal employer's direct workers, wage rates, holidays, hours and other conditions are the same, and a dispute goes to the Chief Inspector-cum-Facilitator or the notified Inspector-cum-Facilitator, whose decision is final. All contract labour are made members of the EPFO and the ESIC subject to applicability. Changes in the number of workers or conditions are notified in Form XIII.
- Work order intimation (rule 49). Within fifteen days of receipt, with the principal employer's name, premises address, date of commencement, the number of contract labour and the duration, electronically on the portal or to the email notified.
- Single licence (rule 52). For more than one district or the whole State, in Form-XIII to the notified authority; districts are consulted electronically, and no response within thirty days is deemed consultation; rules 45 to 50 apply; the licence is valid one or three financial years.
- Death of licensee (rule 53). The heir applies within two months in Form XVII for transfer.
Suspension, revocation and appeal (rules 50 and 54)
If the licence was obtained by misrepresentation, conditions were breached or the Code was contravened, the Licensing Authority issues a fifteen-day show cause notice electronically, examines the reply received within fifteen days and, if continuing the contract business would lead to grave harm to the workers, may pass a speaking order for revocation or suspension. If the contractor complies in time the suspension is revoked by speaking order; if not, the licence may be revoked forthwith. The appellate authority under section 52 is an authority notified by the State Government (rule 54).
Wages, experience certificate and core activity (rules 55 to 59)
The wage period does not exceed one month, wages are paid before the expiry of the seventh day after the last day of the wage period, and only by bank transfer or electronic mode (rule 55). If the contractor or principal employer does not pay, the Chief Inspector-cum-Facilitator or notified officer inquires after hearing both and orders payment from the contractor's security deposit; the contractor re-furnishes the deposit within fifteen days or the licence is liable to suspension, and the principal employer pays any unpaid balance and recovers it from the contractor (rule 56). An experience certificate in Form-XVIII is issued on demand (rule 57). A question whether an activity is core is taken to the notified authority (rule 58), and the Government decides within thirty days of receiving the report (rule 59).
Inter-State migrant workers (rules 60 to 62)
The Central rule is rule 102. The employer pays a lump sum for to and fro journey fare "by train (not less than II Class Sleeper) or by bus or any other mode of passenger transport" from the place of employment to the home State to a worker who has worked not less than 180 days in the preceding twelve months, once in twelve months. On a change of employer, the new employer pays on the worker's certificate if 180 days in the preceding twelve months are completed including the period with the previous employer (rule 60). The Chief Inspector-cum-Facilitator or the Commissioner of Labour provides a helpline number without call charges for queries and grievances (rule 61), and the State may identify studies on migrant worker safety, health and welfare (rule 62). Every employer also submits statistics of inter-State migrant workers and their occupational safety and health data on the State's designated portal (rule 21).
A worked example
Kolleru Civil Works, an invented contractor, wins a work order for 120 contract workers at a plant in Eluru. It informs the authority within fifteen days of the order, applies in Form-XIII with the Form-XIV undertaking and the principal employer's Form XV certificate, and pays a security deposit of Rs.1000 per worker as the rule prints. The fee falls in the 101 to 200 band, subject to any notification modifying it. The plant provides toilets, drinking water, first aid, canteen and crèche; Kolleru pays wages by bank transfer before the seventh day after each wage period.
Common lapses
- Applying for renewal less than 30 days before expiry without budgeting the twenty five percent.
- Paying contract wages in cash.
- Failing to intimate a work order within fifteen days.
- Principal employers leaving the amenities to the contractor.
- Not re-furnishing the deposit within fifteen days after a wage payment from it.
Need help with contractor licences?
Fees, deposits and renewal windows move with the workforce, and the principal employer carries exposure too. Our labour law compliance team can set up the licence calendar and the checks.
Key takeaways
- No licence up to 49 contract labour; fee slabs from Rs. 5,000 for 50 to 100, as modified by notification.
- Security deposit: Rs.1000 for each workman.
- Renewal: 90 to 30 days before expiry; twenty five percent additional fee if late; deemed renewal after seven days.
- Wages by bank transfer before the seventh day; principal employer provides amenities.
- Journey allowance for migrant workers after 180 days in twelve months.
Read next
- OSH (Andhra Pradesh) Rules, 2026: registers, records, returns and the Inspector-cum-Facilitator
- OSH (Andhra Pradesh) Rules, 2026: beedi and cigar, audio-visual and plantation workers
- Rules 87 and 88 of the OSH Central Rules, 2026: contractor licence application and single licence
- Rule 102 of the OSH Central Rules, 2026: journey allowance to inter-State migrant worker
Disclaimer: Based on the State or Union territory rules named above, as notified under the Labour Codes and consulted on 4 October 2026. Later amendments, State notifications, fees and forms should be checked in the State Gazette and on the State labour department website. This article is general information, not legal advice; check the official text before acting.