Sections 46 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.
Section 46 of the Occupational Safety, Health and Working Conditions Code, 2020 (the OSH Code) lets the appropriate Government appoint Gazetted officers as the designated authority for contract labour licences. Section 47 says no contractor may supply or engage contract labour, or execute work through it, without a licence, and creates a work specific licence for contractors who do not meet the criteria.
A contractor to whom Part I of Chapter XI applies cannot supply or engage contract labour, or undertake work through contract labour, except under a licence issued by the authority under section 119(1) (section 47(1)). The licence states the number of contract labour and the security deposit. A contractor who does not meet the prescribed qualifications may get a work specific licence for one work order, electronically renewable (47(2)). A contractor working in more than one State or all India may apply to the Central Government's designated authority (first proviso to 47(3)).
Section 46: the designated authority
The appropriate Government may, by an order, appoint Gazetted officers of the Government as the authority under section 119(1), specify their limits of jurisdiction, and give them powers and duties including issuing and revoking licences electronically. The common licence under section 119 is covered in our article on section 119.
Section 47: licensing of contractors
| Sub-section | Content |
|---|---|
| 47(1) | No contractor to whom this Part applies shall (a) supply or engage contract labour in any establishment, or (b) undertake or execute work through contract labour, except under a licence. The licence is issued by the section 119(1) authority after satisfying itself that the contractor has the prescribed qualifications or criteria, and it specifies the number of contract labour and the amount of security |
| 47(2) | If the contractor does not meet those criteria, the authority may issue a "work specific licence", electronically renewable within a prescribed period, only for the concerned work order, on the conditions in the licence |
| 47(3)(a) | A licence may carry conditions on hours of work, fixation of wages and other essential amenities as prescribed |
| 47(3)(b) | The licence is obtained from the authority designated by the Central Government (if it is the appropriate Government) or by the State Government (if it is) |
| First proviso | For more than one State or the whole of India, the contractor may apply to the authority designated by the Central Government, and section 119 applies |
| Second proviso | Before issuing that licence, the authority must consult the concerned State authorities electronically for establishments where the appropriate Government is the State |
Contractors and principal employers deciding which licence to hold, and from whom, can use our labour law compliance service to map each site and work order to the right authority.
The number and the deposit
The licence is not open-ended: it states how many contract labour can be supplied or engaged and the security deposit. Employing more than the number shown breaches the licence, and the Central Rules make this an express condition (Rule 89(2)(ii)).
Work specific licence (47(2))
This is the option for a contractor who does not fulfil the prescribed qualifications or criteria. It is:
- issued by the authority, which "may" issue it (not a right);
- only for the concerned work order, as specified in the licence;
- electronically renewable within the period the Central Government prescribes; and
- subject to conditions specified in the licence.
What the Central Rules, 2026 say
The Occupational Safety, Health and Working Conditions (Central) Rules, 2026 (G.S.R. 345(E), 8 May 2026) apply where the Central Government is the appropriate Government. Where a State is, use the State's rules.
Rule 85: qualification and criteria. To obtain a licence the contractor, as an entity or individual, shall not be an un-discharged insolvent, or be convicted at any time during the last two years of an offence punishable with more than three months of imprisonment.
Rule 86: conditions of licence. The contractor ensures that hours of work conform to the rules on section 25, wages are paid in accordance with the Code on Wages, 2019, and that, where contract labour works at the principal employer's premises, the principal employer provides amenities such as toilet, washroom, drinking water, bathing facilities if required, changing room, first aid box, canteen and crèche, while the contractor provides all other facilities and entitlements. Rule 86(2) allows the Chief Labour Commissioner (Central) to have unpaid minimum wages paid from the security deposit, including by invoking the bank guarantee. Rule 86(3) requires intimation of a work order within fifteen days.
Rule 88: single licence for more than one State or the whole of India.
- Apply electronically on the Shram Suvidha Portal or another designated portal in FORM-XXI.
- The State Government is consulted electronically; if there is no response within thirty days, consultation is deemed complete.
- The application is approved or disapproved within forty-five days; beyond that there is deemed no objection and the licence is auto-generated on the portal.
- A copy goes to the State Government in whose jurisdiction the work is done; the licence is valid for five years.
Rule 89: terms. The licence is in FORM-XXII; it is non-transferable; the number of contract labour on any day must not exceed the maximum in the licence; fees are non-refundable; wages must not be less than those under the Code on Wages, 2019 or any higher agreement, settlement or award.
See our articles on Rules 85 and 86, Rules 87 and 88 and Rules 89 and 90.
Practical points
- Check applicability first. Part I applies at fifty or more contract labour; see section 45.
- Choose the right licence. A standard licence states headcount and deposit; a work specific licence covers one work order; a single licence covers more than one State or all India.
- Watch headcount. Do not exceed the number in the licence on any day.
- Keep non-transferability in mind. A licence cannot be handed to another contractor.
- Check the principal employer. A principal employer should ask for the licence before engaging a contractor; see section 54.
- Apply early. Processing periods and deemed approval are set in Rule 88, but the clock runs from a complete application.
Example. A facility services contractor with staff in three States applies in FORM-XXI on the Shram Suvidha Portal for a single licence. The authority consults the State authorities electronically, decides within forty-five days, and the licence issues for five years with the maximum number of contract labour stated.
For the old-law comparison, see our guides on how to apply for a contractor licence and on the contractor licence under Form IV.
Need help with a contractor licence?
The right licence type, the headcount and the authority depend on where and how you work. Our labour law compliance team can prepare the application, check the licence conditions and set up tracking for headcount and renewal.
Key takeaways
- No contractor may supply or engage contract labour without a licence (47(1)); the licence states headcount and security deposit.
- A work specific licence (47(2)) covers one work order where the contractor lacks the prescribed qualifications.
- Multi-State or all-India work: apply to the authority designated by the Central Government, with electronic consultation of States.
- Rule 85: no un-discharged insolvent; no conviction in the last two years for an offence punishable with more than three months.
- Rule 88: 45-day decision or deemed approval; five-year validity.
Read next
- Section 45: applicability of contract labour provisions
- Sections 48 and 49: licence procedure and no fees from contract labour
- Rules 87 and 88: contractor licence application and single licence
- How to apply for a contractor licence
Disclaimer: Based on the Occupational Safety, Health and Working Conditions Code, 2020 (as enacted) and, where noted, the Occupational Safety, Health and Working Conditions (Central) Rules, 2026 (G.S.R. 345(E), 8 May 2026), as on 30 September 2026. The Code is in force from 21 November 2025; some provisions may be notified later, and State Governments make their own rules for establishments where the State is the appropriate Government. Verify the current position before acting.