Is a sub-contractor's crew the principal employer's contract labour?

Yes. Section 2(1)(m) of the OSH Code 2020 counts a worker hired through a contractor as contract labour of the establishment with or without the principal employer's knowledge, and section 2(1)(n) defines a contractor to include a sub-contractor. The site's duties to that crew, including liability for unpaid wages under section 55(3), apply from the first shift.

How can a site detect an undisclosed sub-contractor?

By reconciling the gate register against the wage intimation the contractor must send under section 55(2) of the OSH Code 2020, worker by worker rather than in total. A worker who badges in under a contractor's name but is missing from that contractor's wage report is being paid by someone else.

What should a site's contract say about sub-contracting?

At least that the contractor may not sub-contract without the site's prior written consent naming the sub-contractor and the work, and that any sub-contractor's licence, Labour Identification Number and work-order intimation are provided before its first shift. Without such a clause, a second layer can arrive unseen.

When a contractor's crew had a second employer

An engineering components plant in Tamil Nadu asked us to run its monthly contractor-pack review, and the first month's reconciliation found a group of packing-line workers who appeared in the gate register under its contractor's name but not in that contractor's wage intimation. They were employed and paid by a smaller firm the contractor had brought in without telling the site. Under the OSH Code, they were the site's contract labour all the same.

The situation

~210contract workers across machining, assembly and packing, under one contractor [VERIFY: composite figure]

17workers on the gate register missing from the contractor's wage intimation [VERIFY: composite figure]

5 monthsthe sub-contracted crew had been on site before the reconciliation [VERIFY: composite figure]

0mentions of sub-contracting in the site's contract with its contractor [VERIFY: composite]

The plant ran three shifts and took on a second packing line ahead of a model change, and the extra crew arrived with the contractor's supervisor and the contractor's badge format [VERIFY: composite]. Nothing at the gate distinguished them. The difference only showed when the gate register was laid against the wage intimation the contractor sends under section 55(2) of the OSH Code 2020, worker by worker, which is the first check in our monthly pack.

The law did not depend on whether the site knew. Section 2(1)(m) of the OSH Code counts a worker hired through a contractor as contract labour of the establishment "with or without the knowledge of the principal employer", and section 2(1)(n) defines a contractor to include a sub-contractor. The seventeen were the site's contract labour from their first shift.

What the reconciliation found

Check	What it found
Wage intimation to the site	None for the seventeen; the sub-contractor paid them and reported to no one [VERIFY: composite]
Work-order intimation on Shram Suvidha	Not filed by the sub-contractor [VERIFY: composite]
Licence	The sub-contractor held none; whether it needed one was put to counsel
Wage rate	Below the rate the main contractor paid for the same packing role [VERIFY: composite]
PF and ESI	ESI registration for the crew; PF for only part of it [VERIFY: composite]
Site paperwork	Registration and the draft annual return listed one contractor only

What we did

Took it to the site's counsel first, with the gate register, the wage intimations and the sub-contractor's documents attached, because the answer on licensing decided which route was open.
Moved the seventeen onto the main contractor's rolls from the next wage period, on their existing UAN and ESIC numbers, with appointment letters and the main contractor's rate for the role [VERIFY: composite].
Paid the rate difference for the five months through the main contractor, with the site holding the amount from the contractor's next invoice until the payment was evidenced [VERIFY: composite].
Closed the PF gap for the months the sub-contractor had not covered, with challans in the pack before the invoice was released [VERIFY: composite].
Updated the site's paperwork: registration particulars within thirty days, and both firms listed for their months in the annual return.

What changed

	Before	After
Sub-contracting	Not addressed in the contract	Prior written consent required, naming the sub-contractor and the work
Gate register	Workers recorded by badge, under the main contractor	Workers recorded against the company that pays them
Monthly check	Headcount compared in total	Gate register reconciled to wage intimations worker by worker
New crews	Arrived with the contractor's supervisor	Licence, LIN and work-order intimation checked before the first shift, for any employer on the floor

The larger change was in what the site counts. A total headcount that matches hides a second employer; a worker-by-worker match against the wage intimation does not.

How Velura Services helps

Velura deploys only its own workers, each on our registers and challans, and reconciles them to your gate register every month. If you suspect your current contractor's crew includes workers it does not report, we can help you reconcile the records and close the gap.

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Sources

Figures are a representative composite drawn from our own deployments; no single client is described. Founder to confirm or replace before publish.
Occupational Safety, Health and Working Conditions Code, 2020 (Act 37 of 2020), Gazette text hosted by DGFASLI — s.2(1)(m) (contract labour, "with or without the knowledge of the principal employer"), s.2(1)(n) (contractor includes a sub-contractor), s.3(4) (change in registration particulars), s.45 and s.47 (threshold and licensing), s.54 (unlicensed contractor), s.55(2) (wage intimation to the principal employer). Opened and read.
Occupational Safety, Health and Working Conditions (Central) Rules, 2026, G.S.R. 345(E) dated 8 May 2026 — r.93(2) (same conditions for same or similar work), r.94 (work-order intimation within fifteen days), r.98(9) (annual return Part III listing each contractor). Opened and read from a mirrored copy of the Gazette [VERIFY: against the e-Gazette original].
The Code on Social Security, 2020 (Act 36 of 2020), Gazette text hosted by the Ministry of Labour and Employment — s.2(20) (contractor includes a sub-contractor), s.17(1) and s.31 (PF and ESI for employees engaged through a contractor). Opened and read.