Engaging a labour contractor is not just a sourcing decision — it is a compliance decision. If your contractor cuts corners on wages or statutory dues, the liability can land on you as principal employer. Choosing well is the cheapest risk control you have.
The 10-point checklist
- Valid CLRA licence for your establishment, not expired.
- PF & ESIC registration — and proof they actually file and pay monthly, not just deduct.
- Minimum-wage compliance — workers graded correctly and paid at or above the notified floor.
- A monthly compliance pack handed to you — challans, registers, wage and attendance proof.
- Transparent, attendance-based billing — you pay for verified hours, with a clear trail.
- Replacement TAT / SLA — a defined time to fill an absence so your line never stops.
- Insurance — Workmen’s Compensation / GPA cover and a process for accident claims.
- Worker treatment & retention — on-time salary, payslips and low attrition.
- Financial stability — can they fund a payroll cycle before you pay them?
- References from similar factories in your area.
Red flags
Cash wages with no payslips, “we’ll sort compliance later,” no written agreement, reluctance to share challans, or a rate that looks too low to cover statutory cost — all signal future trouble.
How VedhanHR measures up
Every one of these is built into how we operate — licensed supply, automated PF/ESIC, minimum-wage validation at payroll, a monthly compliance pack, attendance-linked billing and a defined replacement TAT. You get headcount and a clean file.