Difference between Shop And Establishment Act And Contract Labour License

Difference between Shop and establishment license and Contract Labour License

A Shop and Establishment License and a Contract Labour License are two different types of licenses required in some jurisdictions to legally operate a business. Here’s a brief explanation of each:

  1. Shop and Establishment License: A Shop and Establishment License, also known as a Business License or Trade License, is a legal requirement for businesses operating within a specific jurisdiction. It is typically issued by the local municipal corporation or a similar authority. This license is applicable to commercial establishments such as shops, offices, restaurants, hotels, entertainment venues, and other similar establishments. It regulates the working conditions, employment terms, and various obligations of the employer, including working hours, holidays, wages, and employment records. It ensures compliance with labor laws and promotes a safe and healthy working environment for employees.
  2. Contract Labour License: A Contract Labour License is a license obtained by an employer who engages contract workers or hires them through a contractor. Contract workers are individuals who are not directly employed by a company but work under a contract with the employer or a labor contractor. This license is required under the Contract Labour (Regulation and Abolition) Act, 1970, and its purpose is to regulate the working conditions and employment of contract laborers. The license ensures that the employer or contractor complies with specific provisions related to wages, working hours, safety, welfare measures, and other legal obligations. It also provides protection to contract workers by making the principal employer responsible for their welfare.

Difference Shop and establishment license & Contract Labour License

What is shop and establishment license & Contract Labour License?

Shop and establishment License is only applicable for employee in Shop and Establishment.

Contract Labour License- Contractor who engages more than 20 or 50 labours in any work, have to register himself with State labour department. It is the registration taken from Labour department of state where principal employees resides or contractor under takes project.


Who Issue Contract Labour License?

Labour Department: –

  1. State labour Department
  2. Central labour Department

Shop and establishment License, contract labour license

  1. Who is required to get Labour License?


  1. Petty contractor / Contractor
  2. Principal Employer


Benefit of getting Labour License?

  • Statutory Compliance.
  • Pre-requisite for participation in Tender.


What is validity of Contract Labour License?

Petty Contractor/Contractor Principal Employer
One Year Till completion of Project



When should you get Labour License?

Petty Contractor/Contractor Principal Employer
When he gets work from Principal Employer When he employs contractor



Are Labour License and Shop & Establishment License same?



Are Labour License and Contractor License Same?



What documents are required to get Labour License?


Petty Contractor/Main Contractor Labour License Principal Employer Labour License
KYC Documents of Owners/Partners/Directors KYC Documents of Owners / Partners /Directors
KYC Documents of Firm/Company/NGO KYC Documents of Firm/Company/NGO
Address Proof of Registered office LIN Number
Form V/III signed by Principal Employer Address Proof of Registered Office
Work Order/Authority Letter/Agreement of Work
Annexure A, B & Self Declaration


What is the Costing and time involving in getting Labour License?

Contract Labour License costing vary as per state and Number of Labours and for centre Labour license eg; 50 labours (Security Money will be INR 90 per Labour. i.e., 4500 as security money).

contract labour license

What is difference between Labour License and Shop & Establishment License

Sr No. Labour License Shop & Establishment License
1. Issued by Labour Department Issued by Labour Department
2. To work as contractor with principal employer. When one hires or keeps employees
3. Validity of Labour License is 1 Year Validity of shop & Establishment License for Life Time or 10 years.


The requirements for obtaining a Shop and Establishment License may vary from jurisdiction to jurisdiction, but they generally include the following:

  1. Business registration: The business must be legally registered and have the necessary permits and approvals.
  2. Proof of identity: The owner or authorized representative must provide valid identification documents.
  3. Premises details: The license application typically requires information about the business premises, including its address, size, and layout.
  4. Employee details: The number of employees, their qualifications, and other relevant information may be required.
  5. Working hours: The business needs to specify its working hours and days of operation.
  6. Employment records: Maintaining accurate records of employee details, attendance, wages, and leaves is essential for compliance.

To obtain a Contract Labour License, businesses need to fulfill certain criteria, which may include:

  1. Registration: The business must be registered under the appropriate laws and hold valid licenses or permits.
  2. Contract agreements: The license application may require details of the contract agreements with labor contractors and the terms of engagement with contract workers.
  3. Employee welfare measures: The business must demonstrate its commitment to providing necessary welfare measures, such as housing, healthcare, and social security benefits, to contract workers.
  4. Safety provisions: Compliance with safety regulations and provisions for accident prevention, first aid, and emergency preparedness are essential.
  5. Wage and benefit compliance: The license application may necessitate proof of adherence to minimum wage


If you want to make Shop and Establishment License & Contract Labour License for your Business then contact undersigned:-

Call Us @08298057771


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