Understanding the Contract Labour Regulation and Abolition Act (CLRA)

The CLRA was enacted to regulate the employment of contract labor in various industries and to provide for the abolition of contract labor in certain circumstances. The act aims to protect the rights of contract workers and ensure they receive fair wages and working conditions.

Key Responsibilities of Principal Employers

• Compliance with CLRA: Ensure adherence to the provisions of the CLRA, including registration and compliance with statutory obligations.
• Vendor Selection: Conduct thorough due diligence when selecting contractors.
• Compliance Training: Provide regular training to contractors and their employees on relevant labor laws.
• Regular Audits and Monitoring: Implement a system for regular audits and monitoring of contract labor engagement.

Contractor Licenses and Documentation

Before engaging contract labor, principal employers must verify that contractors possess the necessary licenses and registrations as per the CLRA.

Control and Supervision

While principal employers can assign tasks to contracted labor, they must refrain from exercising direct control or supervision.

Ensuring Minimum Wages

Contract workers must receive salaries that meet or exceed the prescribed minimum wages. Principal employers should monitor wage disbursement and maintain records of payments made to contractors.

Avoiding Sham Contracts

To prevent contracts from being deemed non-genuine, principal employers should draft clear and well-defined contracts.

Record Keeping and Compliance

Principal employers are responsible for ensuring that statutory obligations are met. Implementing a centralized database for record-keeping can facilitate transparency.

Checklist for Compliance with CLRA

For Principal Employers:

• Obtain a registration certificate for the establishment.
• Verify the contractor’s license and ensure it is renewed.
• Submit annual returns in Form XXV to the licensing officer.
• Issue slips detailing wages and attendance to employees.
• Maintain records of wage payments and ensure service certificates are provided.

For Contractors:

• Provide service certificates to employees.
• Submit half-yearly returns in Form XXIV to the licensing officer.