Contract Workers Under the OSH Code: What the Principal Employer Owes Them
Licences, welfare, core activities and safety: what the OSH Code puts on the principal employer when contract workers are on site, and when the 50-worker line applies.
EHS & HSSE6 min read
Say your plant runs with 120 people on its own payroll, plus a loading contractor with 30 workers, a housekeeping firm with 15 and a civil contractor who brings 20 for a new shed. On paper you employ 120. Under the Occupational Safety, Health and Working Conditions Code, 2020, the number that decides several of your duties is closer to 185, and some of what those 65 contract workers are owed is owed by you, not by their contractor.
The OSH Code has been in force since 21 November 2025. It brought the old Contract Labour (Regulation and Abolition) Act into the same code as factory safety, so the rules on contract workers now sit next to the rules on guarding, canteens and accident notices. This post covers what the Code itself says about the principal employer: when the contract labour part applies, which licences you should see, what you must provide yourself, and where the safety duty falls.
Who counts as the principal employer
For a factory, the Code names the owner or occupier as the principal employer, or a manager the owner names for the purpose. For other establishments it is the person responsible for the supervision and control of the establishment. If contract workers work in your plant, that is usually you.
The definition of contract labour is wide. A worker hired in or in connection with your work through a contractor counts as contract labour whether or not you knew the contractor had brought them in. A sub-contractor counts as a contractor too. So the man the loading contractor's sub-contractor sends on a busy Saturday is contract labour in your establishment.
The Code also includes a contractor within its definition of "employer". That matters for safety, as we will see: the contractor carries an employer's duties for its own workers, and you carry yours for the workplace.
When the contract labour part applies: 50 workers
The part of the Code on contract labour (Chapter XI) applies to every establishment in which 50 or more contract labour are employed, or were employed on any day of the preceding twelve months. It also applies to every manpower supply contractor that employed 50 or more contract labour on any day in that period.
Two details catch people out. The test is any single day in the last twelve months, not an average, so one week with a shutdown crew can bring you in. And the count is all contract labour in the establishment across contractors, not per contractor.
The part does not apply where the work is only intermittent or casual. The Code fixes what that means: work done on more than 120 days in the preceding twelve months is not intermittent, and seasonal work done on more than 60 days in a year is not intermittent either. A housekeeping contract that runs all year does not qualify.
The contractor's licence is your problem too
A contractor covered by the part needs a licence before it supplies or engages contract labour in an establishment, or carries out work through contract labour. The licence states how many contract workers it covers and the security deposit. A contractor that does not meet the criteria for a full licence can be given a work-specific licence for one work order. A contractor working in more than one state can apply for a single licence that covers all of them.
Here is the part that falls on you. If you employ contract labour through a contractor who needed a licence and does not have one, the Code says that employment is deemed to be in contravention of the Code. You cannot treat the licence as the contractor's private paperwork.
In practice: ask every contractor who could take you over the line for their licence before work starts, check that the number of workers on it covers what they bring, and note when it lapses.
Welfare facilities: the principal employer provides them
Section 53 is short and direct. The welfare facilities in sections 23 and 24 shall be provided by the principal employer to the contract labour employed in the establishment. That includes the basics in section 23, such as potable drinking water, and the facilities in section 24, such as first-aid boxes readily accessible in working hours and rest rooms or shelters.
The thresholds for some facilities count contract workers as well. A canteen is required where 100 or more workers, including contract labourers, are ordinarily employed. In the example above, 120 employees alone already cross that line; a plant with 80 employees and 25 contract workers does too, even though neither group does on its own.
So when you plan a canteen, drinking water points, washrooms or first-aid boxes, plan them for the people on site on a normal day, not for the payroll.
Core activities: contract labour is the exception
The Code prohibits contract labour in the core activities of an establishment. It then allows three exceptions: the activity is ordinarily done through contractors in that kind of establishment, it does not need full-time workers for most of the working day or for longer periods, or there is a sudden increase in work in a core activity that has to be finished in a specified time.
The Code leaves the question of what is core to the appropriate government, which can appoint an authority to advise it, and anyone aggrieved can ask the government to decide. If a contractor's crew is doing your main production work all year round, it is worth a conversation with your adviser.
Safety: two employers, one workplace
The Code's general duties apply to every employer. Each must keep the workplace free from hazards that cause or are likely to cause injury or occupational disease to employees. In a factory, construction work and certain other establishments, the employer must also ensure and be responsible for the safety and health of employees, workers and other persons. Because a contractor is an employer under the Code, it owes this to its workers. Because the hazards are in your plant, you owe it too.
Accident notices follow the same logic. Where an accident in an establishment causes death, or keeps the injured person from working for 48 hours or more, the Code requires notice to the authorities in the manner and time the rules prescribe. A contract worker's lost-time injury in your plant is an accident in your establishment, whoever pays the worker. Check the rules that apply to your state for the form and the deadline.
A short checklist for the next contract
- Count everyone. Keep a daily headcount of contract workers by contractor, and look at the highest day in the last twelve months, not the average.
- See the licence. For every contractor, record the licence number, the number of workers it covers and its validity, before work starts.
- Induct before access. Give every contract worker a site induction on your hazards, record the date, and decide when it must be repeated.
- Plan welfare for the real number. Size canteens, rest rooms, drinking water and first aid for employees and contract workers together.
- Report their incidents as yours. Log contract workers' injuries and near misses in the same register as your employees', and send the notices the rules require.
Where Rampart fits
Most of this is record-keeping that breaks when it lives in a contractor's file. Rampart keeps a contractor register with each contractor's documents, such as the labour licence, with expiry dates and reminders before they lapse. It holds each contract worker's induction date and medical fitness validity, records incidents for employees and contract workers in one register, and runs permits to work and inspection checklists from a phone, for one site or several.
See EHS & HSSE for what's included, or book a demo below.
Sources
- The Occupational Safety, Health and Working Conditions Code, 2020 (Act No. 37 of 2020), India Code: section 2 (definitions of contract labour, contractor, employer and principal employer), sections 6, 10, 23 and 24, and Chapter XI, sections 45, 47, 53, 54 and 57
- Ministry of Labour and Employment: the four labour codes come into force, November 2025
This article summarises the Code as of November 2026. It is general information, not legal advice: the central and state rules add forms, fees and deadlines, so check the rules that apply to your sites.
