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 VIII and IX of the Occupational Safety, Health and Working Conditions (Bihar) Rules, 2026 (rules 42 to 56) govern contractors who supply contract labour or execute contract work in Bihar, and employers of inter-State migrant workers. They fix the licence fee by number of workers, a security deposit by worker, the renewal window and the journey allowance. This article sets out each as printed.
The rules are the Occupational Safety, Health and Working Conditions (Bihar) Rules, 2026, notified under notification 1/OSHC-01/2021-100, as notified on 30 June 2026 and published in the Bihar Gazette (Extraordinary) No. Patna 699 of 1 July 2026. Rule 1(3) says they come into force on the date of their publication in the Official Gazette. No licence is required up to 49 contract labours (rule 44). The security deposit, as a bank guarantee, is Rupees 1000/- for each worker to be employed (rule 44(1)). Contract-labour wages are paid before the expiry of the seventh day after the wage period (rule 50).
Later amendments and State notifications under these rules should be checked in the State Gazette. A labour law compliance review can place a contractor in the correct fee band before the application is filed.
Application, licence and conditions (rules 42 to 44)
| Item | Rule | As printed |
|---|---|---|
| Application | 43(1), (2) | On-line through the Online Portal in Form-XIII to the licensing authority notified by the State Government, whether for supplying or engaging contract labour or for undertaking or executing contract works |
| Licence | 43(3) | In Form-XIV; non-transferable; the number of contract workers on any day not to exceed the maximum in the licence; fees non-refundable save as provided; wages not less than the rates under the Code on Wages, 2019 or higher rates fixed by agreement, settlement or award |
| Hours and wages | 42(1)(a), (b) | Hours conform to the rules under section 25 of the OSH Code; wages are paid in accordance with the Code on Wages, 2019 |
| Facilities at the principal employer's premises | 42(1)(c) | The principal employer provides toilet, washroom, drinking water, bathing facilities if required, changing room, first aid box, canteen and crèche; all other facilities and entitlements are provided by the contractor |
| Contractor at other premises | 42(1)(d) | Contract labour may use functional amenities such as toilet, washroom, drinking water, bathing facilities, changing room and first aid box; in all other cases the contractor provides all facilities |
The Central rules are explained in our posts on rules 85 and 86 of the OSH Central Rules, qualification of contractor and conditions of licence and rules 87 and 88, contractor licence application and single licence.
Fees and security deposit (rule 44)
The security deposit, in the form of a bank guarantee, is calculated at the rate of Rupees 1000/- for each worker to be employed as contract labour, and is deposited before the licence is issued (rule 44(1)). The fees for the grant of a licence are:
| Number of contract labours | Fees |
|---|---|
| No licence is required up to 49 | NIL |
| 50 but does not exceed 100 | Rs. 1000 |
| 101 but does not exceed 300 | Rs. 2000 |
| 301 but does not exceed 500 | Rs. 3000 |
| 501 but not exceeding 1000 | Rs. 5000 |
| 1001 but not exceeding 5000 | Rs. 10,000 |
| 5001 but not exceeding 10000 | Rs. 20,000 |
| 10001 but not exceeding 20000 | Rs 30000 |
| 20001 and above | Rs.40000 |
Renewal, refund and responsibilities (rules 45 to 48)
- Renewal (rule 45). Apply electronically on the Online Portal before the expiry of the licence period but not before 90 days of expiry. The security deposit and fee are the same as for grant. If the application is not received in time, an additional fee of 25 per cent is payable, and the licence is not renewed after one year from the date of expiry. The authority is responsible for renewing within 30 days.
- Refund (rule 46). On expiry, a contractor who does not want renewal applies electronically for refund of the security (bank guarantee) with a copy of the licence, notice of completion of work and bank details. If there is no breach or order of forfeiture, the authority directs refund; any forfeited portion is deducted; the application is disposed of as far as possible within 30 days.
- Responsibilities (rule 47). Wages not less than the Code on Wages rates or the higher agreed rates; where contract workers do the same or similar work as the principal employer's direct workers, wage rates, holidays, hours of work and other conditions are the same, and a dispute whether the work is similar goes to the Inspector-cum-Facilitator whose decision is final; all contract labour are made members of EPFO and ESIC subject to applicability under the Code on Social Security; and the contractor notifies any change in numbers or conditions of work to the Licensing Authority electronically.
- Work order intimation (rule 48). Every principal employer and contractor intimates, within fifteen days of receiving a contract work order, the principal employer's name, the premises, the date of commencement, the number of contract labour and the duration, electronically on the Online Portal, sent by the contractor or his authorised representative. If the contractor fails, the designated authority may, after a show-cause opportunity, suspend or cancel the licence.
The Central renewal and refund rules are in our post on rules 91 and 92 of the OSH Central Rules, renewal of licence and refund of security deposit.
Appeal, wages and certificates (rules 49 to 53)
| Item | Rule | As printed |
|---|---|---|
| Appeal | 49 | The appellate authority under section 52 is notified by the State Government under section 119(6) |
| Wage period | 50(1) | Fixed by the contractor; no wage period exceeds one month |
| Time of payment | 50(2) | Before the expiry of the seventh day after the last day of the wage period |
| Mode | 50(3), (4) | Bank transfer or electronic mode only; if not possible, the contractor takes permission from the Deputy Labour Commissioner of the jurisdiction for the manner |
| Unpaid wages | 51 | The Labour Commissioner, Bihar or a representative or notified officer inquires, hears the contractor and orders payment from the security deposit; the contractor re-furnishes the deposit within fifteen days or the licence is liable to be suspended |
| Experience certificate | 52 | Form-XV, on demand, giving the period, work performed and experience gained |
| Core activity | 53 | A dispute whether an activity is core is raised by an application to the Labour Commissioner, Bihar, with reasons and documents; the State Government decides |
Inter-State migrant workers (rules 54 to 56)
Under rule 54 the employer pays a lump sum on account of fare for a to-and-fro journey by train (not less than II Class Sleeper), bus or any other passenger transport from the place of employment to the place of residence in the home State, if the worker has worked not less than 180 days in the concerned establishment or establishments in the preceding twelve months. It is paid once in twelve months. If the worker changes employer mid-way without having had the allowance, the new employer pays it on the worker's certificate, counting the period with the previous employer, once the worker has 180 days in the preceding twelve months. Our post on rule 102 of the OSH Central Rules, journey allowance to inter-State migrant worker covers the Central rule. The rules print no rupee figure for the journey allowance.
Rule 55 provides for a helpline number without call charges, to be specified by the State Government through notification, to address queries and grievances. Rule 56 allows the State Government to identify studies on the safety, health and welfare of such workers, with help from the Dashrath Manjhi Institute of Labour and Employment Studies or any other reputed institute of the State.
A worked example
Kaimur Facility Services LLP supplies 320 workers to a manufacturing plant in Bihar. It applies on the Online Portal in Form-XIII and, for 320 workers (the 301 to 500 band), pays a fee of Rs. 3000 and furnishes a bank guarantee at Rupees 1000/- per worker, that is Rs. 3,20,000 (320 workers multiplied by Rs. 1000). It informs the Licensing Authority of the work order within fifteen days of receiving it, pays wages by bank transfer before the seventh day after the wage period, and applies for renewal no earlier than 90 days before expiry.
Need help with a contractor's licence in Bihar?
The fee band, the Rupees 1000 per-worker guarantee and the 90-day renewal window decide what a contractor pays and when. Our labour law compliance team can compute the band, prepare the Form-XIII application and calendar the renewal and work-order intimation periods.
Key takeaways
- No licence is needed up to 49 contract labours; above that, fees run from Rs. 1000 to Rs.40000 by band (rule 44).
- The security deposit is a bank guarantee of Rupees 1000/- for each worker (rule 44(1)).
- Renewal: apply within 90 days before expiry; later applications pay an additional 25 per cent and no renewal after one year (rule 45).
- Work-order intimation within fifteen days; wages by bank transfer before the seventh day after the wage period (rules 48 and 50).
- Journey allowance for migrant workers after 180 days in twelve months, once in twelve months (rule 54).
Read next
- OSH (Bihar) Rules, 2026: registers, records, returns and the Inspector-cum-Facilitator
- OSH (Bihar) Rules, 2026: audio-visual workers, beedi and cigar licences and plantation workers
- Rules 87 and 88 of the OSH Central Rules: contractor licence application and single licence
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.