Labour License in Telangana (2026): Shops & Establishments, Contract Labour and Factory Licences After the OSH Code

"Get your labour licence" is advice almost every new business in Hyderabad, Warangal or Karimnagar hears in its first month — usually without anyone saying which licence. This guide is for shop owners, startups, restaurants, contractors and small manufacturers in Telangana. It explains which Labour department registrations you actually need, the Shops and Establishments fee slabs, how the OSH Code has changed contract labour and factory licensing since November 2025, where Telangana stands in its own transition, the online steps, the renewal penalties, and worked examples in rupees.

Quick answer

In Telangana a "labour licence" usually means registration under the Telangana Shops and Establishments Act, 1988, done online at labour.telangana.gov.in in real time, with a fee by headcount and an annual fee after that. Businesses that use 50 or more contract workers need contract labour registration and contractor licences, and premises with 20 or more workers with power (or 40 or more workers without) need a factory licence on tgfactories.cgg.gov.in.

• Register a shop or office within 30 days of starting; average fee on the dashboard ₹500

• Late annual fee: 25% of the fee in December, 50% of the fee from 1 January

• OSH Code in force from 21 November 2025; Telangana's own rules were in draft in 2026

• Contract labour registration and licences: 30-day service time on the Labour portal

What "labour licence" means in Telangana

No single document is called a labour licence. The phrase covers a group of registrations issued by two departments. The Labour department registers shops and establishments, principal employers who use contract labour, contractors, inter-state migrant workmen establishments, motor transport undertakings and construction employers. The Factories department approves factory plans and issues factory licences. Which ones you need depends on what you do and how many people work for you.

Which Telangana labour registration do you need?

Registration	Who needs it	Where
Shops & Establishments registration	Every shop, office, restaurant, clinic, agency or other establishment with or without employees	labour.telangana.gov.in
Principal employer registration (contract labour)	An establishment engaging contract workers above the threshold — 50 or more contract workers under the OSH Code	labour.telangana.gov.in
Contractor's licence	A contractor supplying workers above the threshold	labour.telangana.gov.in
Factory licence	Premises with 20 or more workers with power or 40 or more workers without	tgfactories.cgg.gov.in / TG-iPASS
Building and construction employer registration	Builders and contractors employing construction workers	labour.telangana.gov.in

Shops & Establishments registration

Who needs it

Every shop, office, restaurant, clinic, agency or other establishment with or without employees

Where

labour.telangana.gov.in

Principal employer registration (contract labour)

Who needs it

An establishment engaging contract workers above the threshold — 50 or more contract workers under the OSH Code

Where

labour.telangana.gov.in

Contractor's licence

Who needs it

A contractor supplying workers above the threshold

Where

labour.telangana.gov.in

Factory licence

Who needs it

Premises with 20 or more workers with power or 40 or more workers without

Where

tgfactories.cgg.gov.in / TG-iPASS

Building and construction employer registration

Who needs it

Builders and contractors employing construction workers

Where

labour.telangana.gov.in

For a café, a retail shop, an IT services startup or a clinic, the Shops and Establishments registration is usually the only labour licence. Payroll registrations — ESIC, PF and Telangana professional tax — are separate and depend on headcount and salaries.

Shops and Establishments registration in Telangana

The Telangana Shops and Establishments Act, 1988 covers shops and establishments — in practice retail shops, offices, restaurants and most other places of business that are not factories. The Labour department's FAQ says every employer or owner must apply for registration within 30 days of starting the business, whatever the trade and even if the owner works alone.

The service is now a one-time registration issued in real time. The department's public dashboard, which reports live figures, lists more than 11 lakh registrations under the Act, a time limit of one day under the state's Public Service Guarantee Act, and an average fee of ₹500. Separately, it counts the annual fee payments that keep a registration current — more than 6.6 lakh of them — which is why accountants still talk about "renewing" the shops licence every year.

Fee by number of employees

The fee is set in the Schedule to Rule 4 of the Telangana Shops and Establishments Rules, 1990, and is the same for a new registration and the yearly payment. The department does not publish the schedule on its website; the slabs below are as reproduced by payroll references, and the portal calculates the exact amount for you.

Count everyone working in the establishment — permanent, temporary, part-time and apprentices — not just people on the payroll register. Under-declaring the headcount is the quickest way to an inspector's notice, because Form-I asks for the number of employees and the department can compare it with your PF and ESIC filings.

Annual fee and late penalties

Under rule 3 of the 1990 rules, an employer can renew for one year or for up to three years at a time, and should apply at least 30 days before expiry. The FAQ on the department's site describes the cycle as renewal by 1 December each year. Paying late costs extra: 25% of the fee of the fee if you apply on or after 2 December but before 31 December, and 50% of the fee from 1 January. The department can waive the penalty for good reason, but don't plan around it.

What the registration commits you to

Registration is not just paperwork. The Act's main rules, as summarised in the department's FAQ, are that employees get a weekly holiday, work no more than 8 hours a day and 48 hours a week without overtime at double rates, receive appointment letters in the prescribed form, and are paid by the 5th of the following month. The FAQ also says women may not be required to work before 6 am or after 8:30 pm, and children under 14 cannot be employed. Employees who complete 240 days get 15 days' paid leave, plus 12 days' casual and 12 days' sick leave. You must keep registers of employment, wages, leave and advances and show them to an inspector on demand.

The OSH Code transition: what changed in 2025–26

The four Labour Codes came into force on 21 November 2025. The Occupational Safety, Health and Working Conditions (OSH) Code, 2020 replaced 13 central laws, including the Factories Act, 1948 and the Contract Labour (Regulation and Abolition) Act, 1970. According to the government's factsheet, it brings in a single registration for establishments with 10 or more employees in place of six separate registrations, raises the factory licence threshold, raises the contract labour threshold from 20 to 50 or more contract workers, and offers single all-India contractor licences valid for 5 years.

The Codes set the framework; rules make it work. The Centre published its OSH (Central) Rules on 9 May 2026, for establishments where the Central Government is the appropriate government. For most private businesses in Telangana — shops, factories, contractors — the state is the appropriate government, and Telangana issued its draft OSH Rules on 8 May 2026, inviting objections within 45 days. Until the state's final rules are notified, the repeal-and-savings clauses of the Codes keep existing rules alive to the extent they are consistent with the Code.

In practice, that means Telangana's Labour department is still running its existing contract labour services. Its dashboard shows principal-employer registrations and contractor licences being processed with a 30-day time limit, and annual fee payments for licences continuing. What has changed is who needs them: a contractor with fewer than 50 or more contract workers contract workers is outside the Code's licensing provisions.

The labour-law transition in Telangana

21 Nov 2025

OSH Code and the other three Labour Codes in force; CLRA Act and Factories Act replaced

8 May 2026

Draft Telangana OSH Rules issued for objections (45 days)

9 May 2026

OSH (Central) Rules published — for central-sphere establishments

9 Nov 2026

Central-sphere establishments with old registrations must update details (six months from the Central Rules)

Pending

Final Telangana OSH Rules — watch the Labour department site and Gazette

Contract labour registration and contractor licence

If your business uses contract workers — security, housekeeping, loading, construction or production support — two registrations come into play. The principal employer (your business) registers the establishment, listing each contractor and the number of workers. Each contractor above the threshold holds its own licence for the work at your site.

The Labour department's dashboard shows a 30-day time limit for both services. Real performance varies: principal-employer registrations averaged 27 days, while contractor licences averaged 17 days with a median of 6. The average fee collected was ₹2,335 for a registration and ₹764 for a licence, with annual licence fees averaging ₹940 — useful for budgeting, though your own fee depends on the number of workers.

Applying on the Telangana Labour portal

1. 1

   Register on the portal

   Create a user account on labour.telangana.gov.in with your mobile number and email. New industrial units can start from TG-iPASS, which routes labour approvals to the department.

   Open Labour Department portal
2. 2

   Choose the service

   Pick Shops and Establishments registration, contract labour principal-employer registration, contractor licence or another service, and read the checklist.

3. 3

   Fill in the form

   Enter the establishment's name and address, nature of business, the employer and manager, and the number of employees by category. For contract labour, list each contractor, the work, and the maximum number of workers.

4. 4

   Upload documents and pay

   Upload identity and address proof, the incorporation document or partnership deed, and, for contractors, the principal employer's certificate. Pay the fee online.

   Tip: The fee is calculated from the headcount you enter — check it before you pay.

5. 5

   Download the certificate

   Shops registration is issued in real time. Contract labour registrations and licences are processed within the 30-day service time; track them on the portal and display the certificate at the workplace.

What the principal employer still owes contract workers. Under the OSH Code the principal employer must provide welfare facilities, health and safety measures to contract workers, and if a contractor fails to pay wages, the principal employer has to pay them. That is a strong reason to check each contractor's licence, PF and ESIC registrations before work starts, even if the contractor sits below the licensing threshold.

Factory licence in Telangana

A factory needs a licence once it employs 20 or more workers using power, or 40 or more workers without power — up from 10 and 20 under the Factories Act. The Factories department runs everything online at tgfactories.cgg.gov.in: plan approval for new or expanded factories, the licence, amendments and transfers, the annual licence fee, and a single integrated annual return that covers both the Factories and Labour departments.

The department's citizen's charter commits to scrutinising a licence application within three working days, inspecting within four, and issuing the licence online within 7 working days if the application is in order and manufacturing has begun. Plans are approved within seven working days. The portal lets you pay the annual licence fee for up to ten years at once, and the department is urging medium-risk factories to self-certify so they are treated as low risk and inspected once in five years instead of once in two. Our guide to the factory licence explains the OSH Code rules in more detail.

Worked examples in ₹

A boutique in Banjara Hills with four staff. It needs only the Shops and Establishments registration. With up to five persons employed, the fee is ₹500 a year. If the owner forgets the annual payment and pays on 10 December, the 25% penalty adds ₹125; on 5 January, the 50% penalty adds ₹250.

A software startup in Madhapur with 35 employees. The office is an establishment, so it registers under the Shops Act in the 21–50 slab — ₹5,000 a year. It also needs PF and ESIC, professional tax, and, as an establishment with ten or more employees, it should watch for the OSH Code single registration once Telangana's rules are final. Its housekeeping contractor supplies six people, well below the contract labour threshold.

A packaging unit in Patancheru with 30 workers and power. Thirty workers with power is above the 20 or more workers line, so it needs a factory licence on tgfactories.cgg.gov.in. If it also uses 55 contract loaders through one contractor, the unit registers as a principal employer and the contractor needs a licence, because 55 is above 50 or more contract workers.

Documents to keep ready

The exact checklist differs by service, but these cover nearly every Telangana labour application:

Documents for Telangana labour registrations

0/7

• PAN of the business and identity proof of the owner, partners or directors
• Proof of the establishment's address — rent agreement, property tax receipt or electricity bill
• Certificate of incorporation, LLP agreement or partnership deed
• List of employees by category with their start dates
• For contract labour: contractor details, nature of work and maximum number of workers
• For contractors: principal employer's certificate and the contractor's own PAN and ID
• For factories: approved plans, power load details and manager/occupier details

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Branches, co-working desks and other special cases

Registration follows the place of business, not the company. A firm with a head office in Gachibowli and a branch in Warangal registers each location separately and pays the slab that matches each location's headcount. The same logic applies to a warehouse or service centre that has its own staff. Keep each certificate displayed at the premises it covers.

Co-working spaces raise a common question. If your team works from a dedicated cabin or a set of desks you rent month to month, that space is where your business is carried on, so register it with the co-working agreement as address proof. If the operator's own registration covers only its staff, it does not cover yours.

Home-based businesses are not automatically exempt either. A consultant who works alone from home and has no employees is in the lowest slab, and many banks and payment gateways still ask for the certificate when opening a current account. Registering costs little and removes the question.

Seasonal and temporary workers count while they are employed. A sweet shop that takes on extra staff before Dasara and Diwali should check whether the higher headcount moves it into the next slab, and update its registration if it does.

Order of registrations for a new Telangana business

Step 1

Trade licence from the municipality

Step 2

Shops & Establishments registration

within 30 days

Step 3

Professional tax enrolment

Step 4

PF and ESIC

by headcount

Step 5

Contract labour / factory licence

if thresholds met

Other registrations the Labour department handles

Depending on your business, the same portal also issues registrations under laws for inter-state migrant workmen, motor transport workers and building and construction workers, and handles annual fees for beedi and cigar establishments. A transport operator running buses or goods carriers with employed drivers, or a builder employing construction workers, should check these before starting work, because the Labour department's inspectors look at all of them together. Under the OSH Code several of these registrations are meant to merge into one establishment registration, so expect the forms to change once Telangana's final rules are notified.

Common mistakes and how they get fixed

Assuming the trade licence covers labour law. A GHMC trade licence is a municipal permission. Shops and Establishments registration is a separate Labour department registration, and an inspector will ask for it.

Declaring a lower headcount to pay a lower fee. The fee slab and your obligations both follow the real headcount. If staff numbers grow past a slab, notify the change and pay the difference rather than waiting for the next year.

Missing the December cut-off. The penalty doubles on 1 January. Put the annual payment in your November compliance calendar.

Using contractors without checking their licences. Under the OSH Code, unpaid wages of contract workers fall on the principal employer. Ask for the contractor's licence (if above the threshold), PF and ESIC numbers, and keep wage payment proof.

Applying old thresholds. Many templates still say 20 contract workers or 10 factory workers. Since 21 November 2025 the Code thresholds apply, but confirm them against Telangana's final rules when they are notified.

Not recording closure. If you shut an establishment, intimate the closure to the department so annual fees and inspections stop.

Official links

• Labour Department, TelanganaShops, contract labour and other registrations
• Labour Department — online dashboard (time limits and fees)
• Telangana Factories portalPlans, licence, fees, annual return
• TG-iPASS single window
• OSH Code factsheet (PIB)

What to do next

Register your shop or office within 30 days of opening, diarise the annual fee for November, and check every contractor before they start. Then set up payroll correctly: our salary slip generator handles PF, ESIC and professional tax lines, and the guide to Telangana professional tax explains the slabs and payment. Use the startup cost calculator to budget registration fees alongside rent and deposits.

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 Telangana?

'Labour licence' is the everyday name for the registrations the Telangana Labour and Factories departments issue: registration of a shop or establishment under the Telangana Shops and Establishments Act, 1988; registration of a principal employer and a contractor's licence for contract labour; and a factory licence. Most small businesses need only the Shops and Establishments registration.

How much is the Shops and Establishments registration fee in Telangana?

The fee depends on how many people you employ. The slabs in the Schedule to Rule 4 of the 1990 rules, as reproduced by payroll references, run from ₹100 with no employees and ₹500 for up to five, to ₹10,000 for 51–100. The department's dashboard shows an average fee of ₹500. Confirm the figure the portal calculates before paying.

How do I apply for a labour licence online in Telangana?

Register on labour.telangana.gov.in, choose the service (Shops and Establishments registration, contract labour registration or contractor licence), fill in the form, upload documents and pay online. Shops registration is issued in real time. New industries can apply for labour and factory approvals through TG-iPASS; factory licences run on tgfactories.cgg.gov.in.

Do I need a contract labour licence in Telangana after the OSH Code?

Under the OSH Code, in force since 21 November 2025, the contract labour rules apply where 50 or more contract workers are engaged — up from 20 under the old CLRA Act. Telangana's own rules under the Code were still in draft in 2026, so the Labour department continues to process contract labour registrations and licences on its portal. Check your status before you deploy contractors.

Is renewal required for Shops and Establishments registration in Telangana?

Registration itself is a one-time, real-time service on the Labour department portal, but an annual fee is still payable, and the department's dashboard counts these as renewals. Under the 1990 rules, paying late attracts a penalty of 25% of the fee if you apply between 2 and 31 December and 50% of the fee from 1 January.

When does a factory need a licence in Telangana?

Under the OSH Code a premises is a factory when it employs 20 or more workers with power or 40 or more workers without power. Apply on tgfactories.cgg.gov.in; the department's citizen's charter commits to issuing the licence within 7 working days once the application is in order and manufacturing has started.

Sources & verification

Figures on this page were checked against the sources below when it was last reviewed on 9 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.Online Public Dashboard — Labour Department, Telangana — Department of Labour, Government of Telangana · accessed 9 October 2026
2. 2.FAQs — Shops & Establishment Act, 1988 — Department of Labour, Government of Telangana · accessed 9 October 2026
3. 3.Occupational Safety, Health and Working Conditions (OSH) Code, 2020 — factsheet — Press Information Bureau, Government of India (22 November 2025) · accessed 9 October 2026
4. 4.Citizen's Charter — Department of Factories, Telangana — Department of Factories, Government of Telangana · accessed 9 October 2026
5. 5.Factories Portal — Telangana — Department of Factories, Government of Telangana · accessed 9 October 2026
6. 6.Telangana Shops and Establishments Rules, 1990 — LegitQuest · accessed 9 October 2026
7. 7.Telangana Shop & Establishment Registration — fee slabs — CalcGuru · accessed 9 October 2026
8. 8.Did OSH Code 2020 create an impossible registration deadline? — LiveLaw (16 July 2026) · accessed 9 October 2026
9. 9.Draft Telangana Occupational Safety, Health and Working Conditions Rules, 2026 — TeamLease RegTech · accessed 9 October 2026
10. 10.Draft notification of the Telangana OSH Rules, 2026 — Simpliance · accessed 9 October 2026