Contract Labour

Are security guards contract labour?

Usually yes. Agency guards count toward the 50-contract-worker threshold, security is not core work, and the agency needs its own PSARA licence.

Two white CCTV cameras mounted on a bracket on a pole, pointing in different directions, against the dark facade of a building.

Usually, yes. Guards a private security agency supplies to a site are contract labour under the OSH Code 2020, so they count toward the 50-worker threshold for contract-labour licensing, and watch and ward is expressly not a core activity, so it can always be contracted out. The agency needs a licence under the Private Security Agencies (Regulation) Act 2005 as well. The exception is guards the agency employs on a regular, permanent footing.

Do guards count as contract labour?

In most deployments they do, because the definition is wide. Section 2(1)(m) of the OSH Code makes contract labour any worker "hired in or in connection with" the work of an establishment "by or through a contractor", whether or not the principal employer knows. Section 2(1)(n) defines a contractor to include anyone who "supplies contract labour for any work of the establishment as mere human resource". A security agency that posts guards at a plant gate fits both.

The same definition carries an exclusion that matters for security agencies. It leaves out a worker, other than a part-time one, who is "regularly employed by the contractor", engaged on mutually accepted terms including on a permanent basis, with periodic increments, social security and welfare benefits under the law. Some agencies employ their guards exactly that way and rotate them between clients.

Can a site contract out its security at all?

Yes, even where the core-activity ban applies. Section 57 of the Code prohibits contract labour in the core activities of an establishment, with three exceptions. But section 2(1)(p) lists activities that are not core unless the establishment is set up for them, and the second item on that list is "watch and ward services including security services". A factory, warehouse or office can contract its security; only a business that exists to provide security has to look at section 57 for it.

Two licences under two laws

A security agency answers to two regimes, and a site should see evidence of both. The agency's licence to run a security business is separate from any contract-labour licence it holds as a contractor.

LicenceWho needs itUnder
Private security agency licenceAny agency that provides private security guards, issued by the State's Controlling Authority and valid for five yearsPrivate Security Agencies (Regulation) Act 2005, s.4 [VERIFY: Act text; the copy on the MHA portal is a scanned image]
Contractor's licence for contract labourA contractor, or the establishment, once 50 or more contract labour were employed on any day of the preceding twelve monthsOSH Code 2020, s.45(1)
Labour licence and registration numbers, EPF and ESI codesAsked for in the agency's licence applicationPSA Central Model Rules 2020, licence application form (G.S.R. 776(E), 15 December 2020)

The threshold in section 45 counts all contract labour at the establishment, so guards are added to the production and warehouse crews, not counted separately. A site with 40 workers through its main contractor and 12 guards through an agency has 52 contract labour [VERIFY: subject to the regular-employment exclusion above]. One change to note: the Jan Vishwas (Amendment of Provisions) Act 2026 removed the criminal fine of up to ₹25,000 for an agency that fails to display its licence, from 15 May 2026 (MHA notification S.O. 2180(E), 30 April 2026). The duty to hold a licence is unchanged.

What a guard must have before duty

Verification, training and a photo identity card, all issued through the agency. The Central Model Rules 2020 set the standards that States adopt in their own rules:

  • Character and antecedents verification, through the verifying authority, valid for five years once issued, after which the agency issues the guard a character certificate (r.7).
  • Training of at least 100 hours of classroom instruction and 60 hours of field training over at least 20 working days for an entry-level guard; ex-servicemen and former police take a condensed course of 40 and 16 hours over seven days (r.8).
  • A photo identity card showing a full-face colour photograph, the guard's full name, the agency's name, the employee number and the validity date (r.13).
  • Eligibility under the Act: an Indian citizen aged at least 18 and under 65 who meets the training and physical standards, and has not been convicted or dismissed for misconduct (s.10) [VERIFY: Act text].

The agency also keeps registers, electronically, of its guards with their salaries, of its customers, and of the duty roster showing where and when each guard served (r.12 and Form X). The duty roster is the record a site can reconcile with its own gate register.

What a site should check

The same things it checks for any other contractor, plus the agency's security licence. Treating the guards as somebody else's problem is how they drop out of the headcount and the monthly evidence.

  1. The agency's security licence, issued by the Controlling Authority of the State the site is in, and its expiry date.
  2. The guards in the contract-labour count, for the section 45 threshold and the principal employer's returns, unless counsel has advised otherwise.
  3. Verification and training certificates on file for each guard posted, and the photo identity card checked at the gate.
  4. EPF and ESI challans that include the guards, checked against the agency's duty roster and the site's gate register each month.
  5. Wages at the right rate. Check the guards' pay against the Tamil Nadu minimum-wage schedule that covers their work, by zone and skill category, as for any other contract worker [VERIFY: which Tamil Nadu notification covers watch and ward].

How Velura Services helps

Where a site uses a security agency alongside our crew, we count the guards with our own workers in the site's contract-labour headcount, so the threshold and the returns reflect everyone on the gate register. Our monthly evidence pack can carry the agency's licence expiry, guard verification and EPF and ESI challans next to ours, checked against its duty roster.

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Sources

Frequently asked questions

Are security guards from an agency counted as contract labour?

Usually. The OSH Code 2020 defines contract labour as anyone hired in connection with an establishment's work through a contractor, and a security agency supplying guards is a contractor. The definition excludes a contractor's regular, permanently engaged employees with increments and social security, so how an agency employs its guards can matter. That question is for the site's own counsel.

Is security a core activity under the OSH Code?

No, unless the establishment is set up to provide security. Section 2(1)(p) of the OSH Code lists watch and ward services, including security services, among the activities that are not core. A factory, warehouse or office can therefore contract out its security even where the ban on contract labour in core activities applies.

What licence does a private security agency need?

A licence from the State's Controlling Authority under section 4 of the Private Security Agencies (Regulation) Act 2005, valid for five years. Separately, if the agency or the site reaches 50 contract labour on any day in the past twelve months, the contract-labour provisions of the OSH Code apply and a contractor's licence is needed too.

What should a site check about security guards?

The agency's security licence and its expiry, each guard's police verification and training certificate, the photo identity card at the gate, and EPF and ESI challans that include the guards, checked against the agency's duty roster and the site's own gate register. The guards should also be in the site's contract-labour headcount.