C. L (R & A) Act, 1970

The Act applies to all establishments in which twenty or more (differs from state to state) workmen are employed or were employed on any day of the preceding twelve months as contract Labour and every contractor who employs or who employed on any day of the preceding twelve months twenty or more workmen. However, it does not apply to establishments that perform an intermittent or casual nature of work. The appropriate Government shall decide upon the intermittent or casual nature of work after consultation with the Central Board or State Board.

According to the Act, contract labour is a workman who is hired in or in connection with work by or through a contractor, with or without the knowledge of the principal employer. A contractor is a person who undertakes the completion of a particular task for which he is engaged by the principal employer. The scope of the contractor is not only restricted to the supply of goods or articles for the production of goods or completion of a task by contract Labour.

The Act also states that the Principal Employer shall provide the essential amenities like Canteen (above 100 contract Labours), restrooms, drinking water facilities, and first aid facilities if the same is not provided by the Contractor (sector 16 to 19). The expenses incurred on amenities by the principal employer may be recovered from the contractor either by deduction of any amount payable to the contractor under any contract or as a debt payable by the contractor (Section 20). The principal employer must ensure the disbursement of wages through the Contractor should be done within the expiry of the prescribed period by nominating a representative. If the Contractor fails to make a payment or makes a short payment then, the principal employer shall be made liable to make the payment of wages in full or the unpaid balance and recover the amount so paid from the Contractor (Section 21)