Sections 53 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 53 of the Occupational Safety, Health and Working Conditions Code, 2020 (the OSH Code) puts the duty to provide welfare facilities to contract labour on the principal employer, not the contractor. Section 54 says that using a contractor who needed a licence but does not have one is a contravention of the Code by the principal employer.
The welfare facilities specified in sections 23 and 24 must be provided by the principal employer to the contract labour employed in the establishment (53). If a principal employer employs contract labour through a contractor who is required to have a licence but has not obtained it, the employment is deemed a contravention of the Code (54). Checking the contractor's licence is therefore a principal employer's duty, not a courtesy.
At a glance
| Section | Who | What | Consequence |
|---|---|---|---|
| 53 | Principal employer | Provide the welfare facilities of sections 23 and 24 to contract labour in the establishment | Failure is a breach by the principal employer |
| 54 | Principal employer | Do not employ contract labour through a contractor who needs a licence under this Part but has none | Employment is deemed to contravene the Code |
Section 53: welfare facilities for contract labour
Section 53 is a single sentence, but it has a real operational effect. Sections 23 and 24 set the employer's responsibilities for health, safety and working conditions and the welfare facilities in an establishment. Section 53 says those welfare facilities must be provided by the principal employer to contract labour "who are employed in such establishment".
So a contractor's worker who sits in your canteen queue, uses your toilets or needs drinking water at your site is owed the same facilities as your own staff. Read our articles on section 23 and section 24 for what those facilities are. The obligation sits with the principal employer because it controls the premises. Who is a principal employer is explained in our definitions article.
Two points follow from the text:
- The wording is "shall be provided by the principal employer". A contract with the contractor cannot shift that statutory duty, although it may allocate the cost between the parties.
- The section names welfare facilities only (sections 23 and 24). Other duties, such as wage payment, sit with the contractor under section 55, with a fallback on the principal employer.
If you run a site with several contractors and want the facilities, headcount and licences to be checked together, our labour law compliance team can do a site-level review.
Section 54: using an unlicensed contractor
Section 54 applies in one situation: the contractor is required to obtain a licence under this Part and has not. In that case the principal employer's employment of contract labour through that contractor is deemed to be in contravention of the Code.
Note what the text does and does not say:
- It makes the employment a contravention, which puts the principal employer, not only the contractor, in breach.
- It applies only where a licence is required. Whether one is required depends on the Part's applicability and the licensing rules. Under the Central Rules' fee table in Rule 90, no licence is required up to 49 contract labour; licence fees start at 50 and above. Check section 45 and sections 46–47 for the threshold and licensing rules that apply to you, and use your State's rules if the State is the appropriate Government.
- The section does not itself state a penalty. Penalties are in the offences chapter; see section 94.
What follows a licence problem
A contractor whose licence is suspended or revoked under section 51 can no longer supply labour lawfully. In Rule 95 of the Central Rules the authority sends a fifteen day show cause notice electronically, may pass a speaking order where continuing would cause grave harm to contract labour, and endorses the order to the Chief Labour Commissioner (Central) and State authorities. See sections 51–52 for the appeal route.
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 the State Government is the appropriate Government, the State's rules apply.
Rule 93 (responsibility of contractor) also helps a principal employer to audit its contractors. It requires that:
- wages are not less than the rates fixed under the Code on Wages, 2019, or the agreed, settled or awarded rates;
- where contract labour does the same or similar work as direct workers, holidays, hours of work and other conditions of service match those of direct workers (disputes go to the concerned Deputy Chief Labour Commissioner (Central), whose decision is final);
- all contract labour are made members of the EPFO and ESIC, subject to applicability under the Code on Social Security, 2020;
- any change in the number of contract labour or conditions of work is notified on the Shram Suvidha Portal.
Practical points for principal employers
- Verify before onboarding. Collect the licence, check the validity dates and the licensed headcount, and record them in the vendor file.
- Match headcount. Do not let the contractor deploy more workers than the licence permits.
- Map the facilities. List what sections 23 and 24 require (drinking water, toilets, canteen where applicable and so on) and confirm contract labour can use them.
- Write it into the contract. Require licence renewal proof and immediate notice of suspension.
- Re-check at renewal. A lapsed licence is the usual cause of an unlicensed position.
Example. A manufacturing unit engages a packing contractor with 70 workers. Nobody checks the licence, which expired two months ago. The workers also eat in the contractor's own shed because the unit's canteen was meant only for direct staff. The unit has a section 54 problem (an unlicensed contractor) and a section 53 gap (welfare facilities not extended to contract labour). Fixing both means confirming a valid licence and opening the facilities to all workers on site.
For the old-law background, see definitions of contract labour, contractor and principal employer.
Need help with contractor compliance?
Most principal employer exposure comes from three things: expired licences, headcounts above the licence, and welfare facilities not extended to contract workers. Our labour law compliance team can audit your contractor files, check licences against headcount and set up a renewal calendar.
Key takeaways
- The principal employer must give contract labour the section 23 and 24 welfare facilities (53).
- Employing contract labour through a contractor who needs a licence but has none is deemed a contravention (54).
- Under Rule 90's fee table, no licence is required up to 49 contract labour; confirm the rule that applies to you.
- Keep contractor licence, headcount and facility records on file.
Read next
- Sections 51–52: revocation of licence and appeal
- Sections 55–56: contractor wages and experience certificate
- Section 57: prohibition of contract labour in core activities
- Contract labour under the new Labour Codes
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.