Labour Licence in India (2026): Which Registration Your Business Needs and How to Apply After the OSH Code

"Get a labour licence" is advice almost every new business owner in India hears, usually without anyone saying which one. There is no single document by that name. It is shorthand for a handful of registrations from the labour department, and which of them you need depends on what you do, how many people work for you and whether you use contractors. This guide is for owners, HR and payroll teams at small and mid-sized businesses. It sorts out the four main registrations, shows how the OSH Code changed the thresholds from November 2025, lists the official state portals, and works through rupee examples.

Quick answer

For most shops, offices and restaurants, a labour licence means registration under your state's Shops and Establishments Act, done online on the state labour portal. Bigger firms also register as an establishment under the OSH Code once they have 10 or more workers; contractors need a contractor licence from 50 or more contract workers; and manufacturing units need a factory licence from 20 or more workers with power or 40 or more workers without.

• The OSH Code has applied since 21 November 2025; it replaced the Contract Labour Act and the Factories Act

• Contract labour rules now start at 50 or more contract workers (was 20); factory licensing at 20 or more workers with power (was 10)

• Shops and Establishments Acts are state laws and were not replaced — fees and renewal still vary by state

• A contractor licence lasts 5 years; licences under the old Acts stay valid until they expire

What "labour licence" actually means

Labour laws come from both Parliament and the state legislatures, and both levels of government enforce them. That is why a business can deal with two sets of rules at once. The state's Shops and Establishments Act decides whether your shop, office, restaurant or clinic must register with the labour department, and it also sets working hours, holidays and leave. The central Occupational Safety, Health and Working Conditions Code, 2020 (the OSH Code) decides when an establishment must register, when a contractor needs a licence and when a premises counts as a factory.

The OSH Code merged thirteen older laws, including the Factories Act, 1948, the Contract Labour (Regulation and Abolition) Act, 1970 and the Building and Other Construction Workers Act, 1996. According to the government's factsheet, six separate registrations became one and four licences became one. So when your CA, landlord or client asks for your "labour licence", they usually mean one of four things. The first is the shops registration certificate. The second is the OSH registration certificate for a larger establishment. The third is a contractor's licence. The fourth is a factory licence. A municipal trade licence is a different permission from the local body and does not replace any of them.

Which labour registration do I need?

Find your situation in the table. Most businesses fit more than one row, so read all of them. A workshop that uses a contractor's crew may need its own registration and must also check its contractor's licence.

Two details in the table catch people out. First, the OSH Code's headcounts are about workers. The Code's definition leaves out people employed mainly in managerial or administrative roles and supervisors paid more than ₹18,000 a month. But it includes contract labour, because the Code treats them as employed in the establishment where they work. The central registration form asks separately for direct employees, contract employees and inter-state migrant workers, so count all three. Second, the Code lets a state's own pre-Code factory numbers continue in that state until its legislature amends them. That is why our factory licence guide tells you to confirm the threshold with your state directorate.

If you employ 10 or more inter-state migrant workers, the inter-state migrant worker provisions also apply. You give their numbers in your registration and any contractor licence, and the employer pays a journey allowance once a year so they can visit home.

What the OSH Code changed — and what it didn't

The four Labour Codes came into force on 21 November 2025. For licensing, the OSH Code made four changes that matter to a small employer.

Higher thresholds. Contract labour provisions now apply to an establishment that employed 50 or more contract workers on any day of the previous twelve months, and to a contractor who employed that many. Under the CLRA Act the figure was 20. A factory now starts at 20 or more workers with power or 40 or more workers without, up from 10 and 20. The contract labour chapter also doesn't apply where work is only intermittent or casual. Work is not treated as intermittent if it ran for more than 120 days in the preceding twelve months.

One registration and one licence. Instead of separate registrations under the Factories Act, CLRA, BOCW and other laws, an establishment registers once, electronically. The central Form I asks for every contractor's name, the work, the maximum number of contract workers and the dates, so the old separate principal-employer registration is folded in. Section 119 provides a common licence covering a factory, beedi and cigar premises and contract labour, or any combination. The authority must issue it within 45 days of a complete application, or it is deemed issued.

Deemed approvals. If the registering officer doesn't act within the prescribed time, the registration is deemed granted and the certificate is auto-generated. Under the central rules that time is 7 days.

Old licences carry over. A factory or contract labour licence issued under the old central laws is treated as a licence under the Code. It stays valid for the period it was issued for and must be obtained afresh when it expires.

What did not change: the state Shops and Establishments Acts are separate state laws, so your shops registration, its fees and its renewal rules still come from your state. Wage duties did not go away either. The Code on Wages counts a contractor as an "employer", and its minimum-wage and timely-payment rules cover every employee. Monthly wages are due before the end of the 7th day of the next month, whatever your licence position.

The labour licensing transition

21 Nov 2025

Four Labour Codes in force; CLRA Act, Factories Act and BOCW Act replaced by the OSH Code

30 Dec 2025

Draft OSH (Central) Rules published for comment

8 May 2026

Final OSH (Central) Rules notified — Form I registration and contractor licences on Shram Suvidha

Nov 2026

Central-sphere establishments already registered under old laws must update details in Form I (six months from 8 May 2026)

Ongoing

States finalise their own rules; check your state labour portal for the current forms

The transition: why portals still show old forms

Codes set the framework; rules supply the forms and fees. The Centre published draft OSH rules on 30 December 2025 and notified the final OSH (Central) Rules on 8 May 2026 (G.S.R. 345(E)). They apply where the Central Government is the appropriate government — for example banks, insurance companies, mines, major ports and central public sector undertakings, and their contractors. For most private shops, workshops and contractors the state government is the appropriate government, and each state is notifying its own rules.

Until a state's rules are final, the government has said the rules and notifications under the old Acts continue as far as they are consistent with the Codes. You can see this on the portals. When we checked in October 2026, Maharashtra's Labour Management System still offered renewal forms for contract labour licences and factory licences. Tamil Nadu's portal still listed principal-employer registration and contractor licences under the Contract Labour Act. Uttar Pradesh's timelines page still listed principal-employer registration and contractor licences under the Contract Labour Act. Telangana's home page carried feedback from June 2026 consultation meetings on its draft state rules. So apply through whichever service your state's portal offers today. But test your headcount against the Code's thresholds, because those numbers are in the Code itself, not in the rules still being finalised.

Shops and Establishments registration: the state portals

For most readers this is the registration that matters. Each state runs it differently. Delhi's labour department says registration is online and real-time, with no fee and no documents. The Delhi Act asks for the statement within 90 days of starting. Telangana requires every shop to register within 30 days of starting and renew by 1 December (30 days before expiry). Karnataka charges by headcount, with a slab even for establishments with no employees, and takes payment through Khajane-II. Coverage, fees and renewal differ in every other state too. The table lists the official portals we opened in October 2026 and what each showed, with our state guide for fees, thresholds and renewal.

If your state isn't listed, look for the labour department or labour commissioner site ending in .gov.in or .nic.in. Many states also route new businesses through an industries single-window portal. Avoid look-alike sites that charge a "service fee" for a free or low-cost government registration.

How to apply online, step by step

The screens differ by portal, but the flow is the same for a shops registration, an OSH establishment registration or a contractor licence. The central rules use Shram Suvidha for central-sphere establishments and for contractors who want one licence for several states; everyone else uses the state portal.

Applying for a labour registration or licence

1. 1

   Work out your portal

   Use your state labour portal for shops, factory and most contract labour services. Use Shram Suvidha if the Central Government is your appropriate government, or if you are a contractor seeking a licence for more than one state.

   Open Shram Suvidha
2. 2

   Create an employer login

   Register with your mobile number, email and PAN. If you already hold a registration under an older central law, retrieve it with your Labour Identification Number (LIN) instead of starting afresh.

3. 3

   Fill in the form

   Enter the establishment's name, address, PAN and activity code, the employer and manager, and the number of direct employees, contract workers and inter-state migrant workers. Principal employers list each contractor, the work and the maximum contract workers.

   Tip: Declare your highest headcount on any day — thresholds look back twelve months.

4. 4

   Upload documents and pay

   Upload identity and address proof, the incorporation or partnership document and any authorisation letter, then pay online. Contractors also give a security deposit or bank guarantee.

5. 5

   Download and display the certificate

   Shops registration is often issued in real time. Under the central rules the OSH registration certificate is due within 7 days or deemed issued. Display it at the premises.

After you are registered, the duties keep running. Report any change in ownership, management or particulars within 30 days. Report closure within the same period, with a certificate that all dues to workers are paid. Factories, mines, and employers using contract labour or doing construction work also send a notice when work starts and stops. A licensed contractor must report each new work order within 15 days under the central rules.

Documents you will need

Most portals ask for the same core set. Karnataka's e-Karmika, for example, lists address proof for the establishment, identity and address proof of the owner, the incorporation certificate or memorandum for a company, an authorisation letter for the signatory, the payment receipt and the signed form. Delhi's shops registration needs no documents at all. Contractor licences and factory licences need more, as the checklist shows.

Documents to keep ready

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• PAN of the business and identity and address proof of the owner, partners or directors
• Proof of the establishment's address — rent agreement, property tax receipt, GST certificate or electricity bill
• Certificate of incorporation, LLP agreement or partnership deed
• Authorisation letter for the person signing, if not the owner
• Headcount on your highest day: direct employees, contract workers and inter-state migrant workers
• Principal employers: each contractor's name, contact, work, maximum contract workers and dates
• Contractors: work order, PAN, ID and the security deposit or bank guarantee
• Factories: approved plans, power load and occupier and manager details

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Labour licence fees, honestly explained

There is no national labour licence fee, and any page quoting a single figure is guessing. Shops registration fees are set by each state, usually by headcount. At one end, Delhi charges no fee. Karnataka's gazetted schedule charges ₹405 with no employees, ₹810 for one to nine employees and ₹5,400 for ten to nineteen. Some states collect a fee every year and some once. For full schedules see our guides for Telangana, Karnataka and Tamil Nadu.

Contractor licence fees are the one place where the Centre has published a clear table. Under the OSH (Central) Rules there is no licence below the threshold. A licence costs ₹1,000 for 50 to 100 contract workers, ₹2,000 for 101 to 300 and ₹3,000 for 301 to 500, rising in steps for larger contractors. Before the licence is issued the contractor gives a bank guarantee of ₹1,000 per contract worker. The authority can draw on it if workers go unpaid. States set their own amounts, so a state-sphere contractor pays the state's fee.

Factory licence fees are set by state rules on a grid of installed power and the maximum workers on any day, often multiplied by the years you licence for. Our factory licence guide shows how one state's grid works. Budget registration costs alongside rent and deposits with the startup cost calculator.

Validity and renewal

Renewal is where most lapses happen, because each registration follows its own clock.

Shops registration depends on your state. Some states ask for an annual fee or periodic renewal — Telangana's falls due by 1 December (30 days before expiry). Delhi's Act says the certificate is renewed at prescribed intervals. Check the rule in your state guide and put the date in your compliance calendar.

OSH establishment registration has no expiry date: section 3 of the Code sets none. Instead you keep it current by reporting changes within 30 days, and it is cancelled when you report closure. If you were registered under an older central law, the central rules ask you to update your details in Form I within six months from 8 May 2026. That applies to central-sphere establishments; states will set their own window.

A contractor licence is valid for 5 years for the number of workers it names. To employ more, the contractor applies to amend it and tops up the security. Under the central rules, renewal is applied for at least 30 days, but not more than 90 days, before expiry. Applying outside that window costs 25% extra. The authority must renew within seven days or the licence is deemed renewed. A contractor who doesn't meet the qualification criteria can get a work-specific licence tied to one work order.

Factory licences issued before the Code remain valid until they expire. After that you obtain a fresh licence under the Code and your state's rules.

Worked examples: a Pune workshop before and after the OSH Code

Example 1: 30 workers plus a 15-person contractor crew. A precision-engineering workshop in Pune runs powered CNC machines with 30 workers on its own payroll. A housekeeping and loading contractor supplies 15 more people who work on the premises. Before 21 November 2025, the 30 workers already put it far above the Factories Act line of 10 with power, so it held a factory licence. The crew of 15 was below the CLRA threshold of 20, so the workshop needed no principal-employer registration and the contractor needed no licence.

Under the OSH Code the answers barely move. Counting the crew, there are 45 workers on the premises, well above 20 or more workers, so the factory licence stays. The workshop keeps its current licence until it expires and renews under the new rules. The crew is still below 50 or more contract workers, so no contractor licence is needed. What changes is paperwork. The single establishment registration asks for contractor details — the central Form I has a section for them. When Maharashtra's rules or portal call for it, it updates its particulars in the single registration. And it pays the 30 workers before the end of the 7th day of the next month under the Code on Wages. The contractor, as an employer, owes its crew the same minimum wages and deadlines.

Example 2: the same workshop with a 35-person crew. Suppose a large order means the contractor deploys 35 people for most of the year. Under the old CLRA Act, 35 was above 20. The workshop would have needed principal-employer registration, and the contractor a licence, before work began. Under the OSH Code, 35 is below 50 or more contract workers, so neither is required. That is the single biggest change for small manufacturers.

Example 3: the crew reaches 60. If the contractor supplies 60 workers on any day, the contract labour chapter applies to both businesses. The workshop must check that the contractor holds a licence before work starts. Under the Code, using an unlicensed contractor above the threshold is itself a contravention by the principal employer. Under the central rules, a 60-worker licence would cost ₹1,000, plus a bank guarantee of ₹1,000 per contract worker, which comes to ₹60,000. A Maharashtra contractor pays the state's own fee. If the extra work is a short seasonal job, check whether it counts as intermittent before assuming the chapter applies.

The Pune workshop — before and after the OSH Code

Scenario	Before 21 Nov 2025	Under the OSH Code
30 workers + 15 contract workers	Factory licence; no contract labour registration or licence	Factory licence; contractor details in the single registration; no contractor licence
30 workers + 35 contract workers	Factory licence; principal-employer registration; contractor licence	Factory licence; no contractor licence (below 50 or more contract workers)
30 workers + 60 contract workers	Factory licence; principal-employer registration; contractor licence	Factory licence; contract labour chapter applies; contractor licence with security deposit

30 workers + 15 contract workers

Before 21 Nov 2025

Factory licence; no contract labour registration or licence

Under the OSH Code

Factory licence; contractor details in the single registration; no contractor licence

30 workers + 35 contract workers

Before 21 Nov 2025

Factory licence; principal-employer registration; contractor licence

Under the OSH Code

Factory licence; no contractor licence (below 50 or more contract workers)

30 workers + 60 contract workers

Before 21 Nov 2025

Factory licence; principal-employer registration; contractor licence

Under the OSH Code

Factory licence; contract labour chapter applies; contractor licence with security deposit

Common mistakes and how to avoid them

Treating the trade licence as the labour licence. The municipal trade licence covers the use of premises. Labour registration covers your workforce. Most shops and offices need both.

Counting only payroll staff. OSH Code thresholds count workers, including contract labour and inter-state migrants on your premises. A unit with 18 employees and a 5-person security contract has 23 workers, not 18.

Assuming the higher threshold ends all duties to contract workers. Below 50 or more contract workers, a contractor needs no licence. But the Code on Wages still treats the contractor as an employer, and minimum wages and pay deadlines still apply. Ask for proof of payment.

Using an unlicensed contractor above the threshold. The Code makes this the principal employer's offence too. Before each contract starts, check the contractor's licence number, the workers it covers and its expiry date.

Letting an old licence lapse because "the Act was repealed". Licences under the old central laws remain valid until expiry and must then be obtained afresh under the Code. A lapsed licence is not a cancelled duty.

Missing change and closure reports. Moving premises, changing directors or crossing a headcount band without updating the registration leaves you exposed at inspection. Under the OSH Code you have 30 days. If you close, report it and certify that dues are paid, so fees and inspections stop.

After you are registered

Labour registration usually sits alongside payroll registrations that run on their own headcount tests. You will usually also need ESIC registration from 10 or more employees and PF registration from 20 or more employees. Our labour codes guide covers the wider changes to wages, leave and appointment letters. Every worker is now entitled to an appointment letter, and a small employer that hired informally should start there.

Official links

• OSH Code, 2020 — full textSections 3, 45–54, 59, 119
• OSH (Central) Rules, 2026 — GazetteForm I, contractor licence fees, renewal
• OSH Code factsheet (PIB)
• Shram Suvidha Portal 2.0Central-sphere registration and multi-state contractor licence
• Code on Wages, 2019 — India Code
• Delhi shops registration FAQ
• Maharashtra Labour Management System
• Karnataka e-Karmika

What to do next

Start with the decision table. Register your shop or office on your state portal, then check your highest headcount, contractors included, against the OSH Code thresholds. Ask every contractor for its licence, or for written confirmation that it stays below 50 or more contract workers. Then set up payroll correctly. The minimum wage calculator checks pay against state rates, and the salary slip generator issues compliant payslips with PF, ESI and professional tax lines.

This is general information, not legal or tax advice — confirm on the official source or with a professional.

Frequently asked questions

What is a labour licence in India?

It is the everyday name for the registrations a business gets from the labour department. For most shops and offices it means registration under the state's Shops and Establishments Act. Firms with 10 or more workers also register under the OSH Code, contractors with 50 or more contract workers need a contractor licence, and manufacturing units above the factory threshold need a factory licence.

Is a labour licence mandatory for every business?

Most businesses need at least one. Every state has a Shops and Establishments law; Telangana, for example, requires every shop to register within 30 days of opening, whatever the business. On top of that, the OSH Code bars an employer from employing anyone in an establishment that should be registered but is not. Check your state's rule before you open.

How do I apply for a labour licence online?

Use your state labour department's portal for shops, contract labour and factory services, or Shram Suvidha if the Central Government is your appropriate government or you want a multi-state contractor licence. Create a login, fill in the form with headcount and contractor details, upload identity, address and constitution documents, pay the fee and download the certificate.

What is the labour licence fee?

There is no single fee. Shops registration is no fee in Delhi but ₹810 for one to nine employees in Karnataka. Under the central OSH rules a contractor licence for 50–100 workers costs ₹1,000, plus ₹1,000 per contract worker as security. Factory fees depend on horsepower and workers and are set by each state.

When does a contractor need a labour licence?

Under the OSH Code, in force since 21 November 2025, a contractor needs a licence once it has employed 50 or more contract workers on any day in the previous twelve months. The old Contract Labour Act threshold was 20. Smaller contractors do not need the licence, but they must still pay minimum wages on time.

What is the validity of a labour licence and how is it renewed?

It depends on the licence. A contractor licence under the OSH Code is valid for 5 years; under the central rules you apply to renew at least 30 days, but not more than 90 days, before expiry, or pay 25% extra. Shops registrations follow state rules; Telangana's must be renewed by 1 December (30 days before expiry). Licences issued under the old Acts stay valid until they expire.

Sources & verification

Figures on this page were checked against the sources below when it was last reviewed on 31 October 2026. Each rate and limit is stored once with its own official source and review date, and official update channels are monitored daily so changes are picked up. How we verify

1. 1.The Occupational Safety, Health and Working Conditions Code, 2020 (Act 37 of 2020) — Gazette text — Ministry of Labour and Employment, Government of India · accessed 31 October 2026
2. 2.Occupational Safety, Health and Working Conditions Code, 2020 — factsheet (22 November 2025) — Press Information Bureau, Government of India · accessed 31 October 2026
3. 3.Government makes the four Labour Codes effective — Press Information Bureau, Ministry of Labour and Employment · accessed 31 October 2026
4. 4.The Occupational Safety, Health and Working Conditions (Central) Rules, 2026 — G.S.R. 345(E), 8 May 2026 — Gazette of India, Ministry of Labour and Employment · accessed 31 October 2026
5. 5.The Code on Wages, 2019 (No. 29 of 2019) — India Code, Legislative Department · accessed 31 October 2026
6. 6.Shram Suvidha Portal 2.0 — home page — Ministry of Labour and Employment · accessed 31 October 2026
7. 7.The Delhi Shops & Establishment Act, 1954 — Labour Department, Government of NCT of Delhi · accessed 31 October 2026
8. 8.FAQ for Registration under the Shops and Establishment Act (Delhi) — Labour Department, Government of NCT of Delhi · accessed 31 October 2026
9. 9.e-Karmika — Karnataka Shops and Commercial Establishments Act registration — Labour Department, Government of Karnataka · accessed 31 October 2026
10. 10.Karnataka Gazette, 1 January 2025 — amended fee schedules for Labour Acts — Labour Department, Government of Karnataka · accessed 31 October 2026
11. 11.Labour Management System — Registration / Licence Management (Maharashtra) — Labour Department, Government of Maharashtra · accessed 31 October 2026
12. 12.Labour Department, Tamil Nadu — online services — Labour Department, Government of Tamil Nadu · accessed 31 October 2026
13. 13.Timelines and fees for registration and renewal — Labour Department, Uttar Pradesh — Labour Department, Government of Uttar Pradesh · accessed 31 October 2026
14. 14.FAQs — Labour Department, Telangana — Labour Department, Government of Telangana · accessed 31 October 2026
15. 15.eNagar — Shops and Establishment services (Gujarat) — Government of Gujarat (eNagar portal) · accessed 31 October 2026
16. 16.Labour Department, Punjab — Labour Department, Government of Punjab · accessed 31 October 2026