All You Need to Know About Form 3 and Form 5 for Contract Labour
All You Need to Know About Form 3 and Form 5 for Contract Labour – Our Team’s Complete Guide has put together this easy-to-follow guide to help you clearly understand what Form 3 and Form 5 are, why they matter for Contract Labour Licence compliance, and how to file them correctly. These forms are not just paperwork—they are a legal requirement under the Contract Labour (Regulation and Abolition) Act, and missing them can lead to penalties or delays in your licence process. Whether you are a principal employer, a contractor, or a business owner hiring contract workers, knowing these forms is essential to stay compliant and keep your operations smooth. In this guide, we’ve explained everything in plain, simple language, with practical tips, timelines, and common mistakes to avoid—so you can complete your filings quickly, correctly, and with full confidence.
Understanding the Role of Form 3 and Form 5 in Labour Compliance
Form 3 and Form 5 for Contract Labour License are official formats under the Contract Labour (Regulation & Abolition) Act, 1970, designed to maintain proper records of contract workers and ensure that both employers and contractors comply with the law. These forms play a key role in regulating and monitoring contract labour usage in various industries.
Form 3 acts as a formal notification from the principal employer to the Licensing Officer about engaging a contractor for specific work. Form 5 is an authorisation certificate from the principal employer that allows the contractor to apply for and obtain a contract labour licence. Without these forms, a contractor cannot legally hire contract labourers.
Failure to file these forms correctly can result in heavy penalties, licence delays, or even legal action for the employer. Proper filing ensures smooth project operations, legal safety, and a transparent employer–contractor relationship. It also reflects your business’s commitment to compliance and fair labour practices, building trust with workers, clients, and government authorities.
Who Needs to File Form 3 and Form 5?
Form 3 and Form 5 are official documents under the Contract Labour (Regulation & Abolition) Act, 1970. They help keep a proper record of contract workers and make sure that both employers and contractors are following the law. You need to submit these forms if your business hires 20 or more contract workers on any single day in a year, especially when the work is given to a contractor for a specific project or service. This rule is common in industries like construction, manufacturing, IT services, cleaning, security, and facility management. Even if the work is for a short period, both forms must be filed before the work starts to avoid delays or penalties.
Form 3 – This is sent by the principal employer to the Licensing Officer to inform them that a contractor has been hired for certain work. It’s basically an official “intimation” to the government about the work arrangement.
Form 5 – This is given by the principal employer to the contractor, giving them permission to apply for a Contract Labour Licence. Without this, the contractor cannot legally hire contract workers.
Filing both forms on time helps your project run smoothly, keeps you safe from legal trouble, and builds a better, more transparent relationship between you and your contractor. It also shows that your business values fair labour practices and legal compliance.
Difference Between Form 3 and Form 5 Under Contract Labour Rules
| Point | Form 3 | Form 5 |
|---|---|---|
| Purpose | To inform the Licensing Officer that a contractor has been engaged for specific work. | To authorise the contractor to apply for the Contract Labour Licence. |
| Files / Issues | Filed by the Principal Employer to the Licensing Officer. | Issued by the Principal Employer to the Contractor. |
| When Required | Immediately after finalising a contract with the contractor. | Before the contractor applies for the labour licence. |
| Recipient | Submitted directly to the government authority (Licensing Officer). | Handed to the contractor for licence application. |
| Without Form | The government will not have official intimation about the contractor engagement. | The contractor cannot apply for or obtain a labour licence. |
| Legal Impact | Non-filing can result in penalties or non-compliance under the Act. | Non-issuance stops the contractor from legally hiring contract workers. |
Documents Required for Form 3 and Form 5
Company registration documents (Incorporation Certificate/Partnership Deed)
PAN of the company or proprietor
GST registration (if applicable)
Contractor’s name, address, and ID proof
Nature and scope of work assigned to the contractor
Duration of the work
Number of workers to be employed
Board resolution/authorisation letter from company directors
Any existing licence details (for renewal cases)
Government Charges & Fees for Filing
- Fees depend on the number of contract labourers and state rules.
Up to 50 workers → ₹20–₹50
51–100 workers → ₹100–₹150
101–200 workers → ₹200–₹250
More than 200 workers → ₹500 or as per state norms
- Some states also require a security deposit from contractors.
Process to File Form 3 & Form 5 for Contract Labour Licence
Filing Form 3 and Form 5 for Contract Labour License is the first step towards getting a Contract Labour Licence. These forms connect the principal employer, the contractor, and the Labour Department in a legal record, ensuring the work can start without compliance issues. The process is simple if you follow these steps in order:
Step 1: Collect Basic Details
Your company details (name, registration, PAN, GST, address)
Contractor’s details (name, address, ID proof)
Work details (type of work, location, start & end date, number of workers)
Step 2: Fill Form 3
Principal employer fills in Form 3 with contractor and project details.
Attach required documents (company proof, contract copy, authorisation letter).
Submit Form 3 to the Labour Department’s Licensing Officer (online or in person).
Step 3: Fill Form 5
After Form 3 is submitted, fill in Form 5 to officially authorise the contractor.
Mention the same project details and number of workers.
Sign and stamp it with your company seal.
Step 4: Give Form 5 to Contractor
Contractor attaches Form 5 to their licence application.
They submit it to the Labour Department along with fees and any security deposit.
Step 5: Keep Proof & Follow Up
Always keep the acknowledgement receipts for both forms.
Track the license application to make sure it is approved before workers start the job.
Deadlines for Submission of Form 3 and Form 5
Form 3 – File this with the Licensing Officer immediately after finalising the contract with the contractor.
Form 5 – Issue this to the contractor before they apply for the contract labour licence.
The contractor must apply for the licence within the timeline set by state rules (usually before the work starts).
Double-check details in both forms to ensure the contractor’s name, project details, and worker count are correct.
Keep acknowledgement receipts or proof of submission for both forms for future reference.
Make sure the number of workers mentioned matches the actual requirement to avoid disputes later.
File these forms only with the correct Licensing Officer as per your location or project site.
If there are changes in the contractor, worker count, or work scope, update and re-submit the forms as required.
Always keep a copy of approved Form 5 with the contractor for their licence application.
Delays in any of these steps can lead to licence rejection, project delays, or legal penalties.
Penalties for Late or Incorrect Filing
- Late Fees
Filing after the due date can make you pay fines. - Application Rejection
Mistakes in the forms can lead to your licence being rejected. - Work Suspension
Your contract labour work may be put on hold until the forms are corrected. - Extra Inspections
Authorities may check your records more often if errors keep happening. - Legal Trouble
Repeated mistakes can lead to legal action. - Loss of Trust
Clients, contractors, and government officials may lose confidence in you. - Problems in Future Filings
Errors now can make future licence renewals or filings difficult.
Legal Requirements of Filing Form 3 and Form 5
Follow the Law – Keeps your business in line with the Contract Labour Act.
Avoid Legal Trouble – Stops penalties, licence rejection, or court issues.
Get Licence on Time – Helps the contractor get their labour licence quickly.
Official Government Record – Lets the Licensing Officer know about the contractor and the work.
Build Trust – Shows you follow proper rules, which earns respect from authorities and clients.
Keep Work on Track – Prevents your project from stopping because of missing forms.
Clear Roles – Makes it clear what the employer and contractor are responsible for.
Ready for Inspections – Keeps you prepared if the labour department checks your records.
Hire Workers Legally – Allows the contractor to bring in workers from day one without problems.
Good Reputation – Makes your business look responsible and reliable.
Expert Help with Form 3 and Form 5 for Contract Labour
Filing Form 3 and Form 5 for Contract Labour License can be tricky if you’re not familiar with the process. Missing a single document or filling the wrong detail can lead to delays, rejections, or even penalties. That’s where we come in.
At LabourLicense.in, our team helps you from start to finish — collecting the right documents, filling in accurate details, and submitting the forms to the Labour Department. We also guide you on the rules, deadlines, and requirements so everything is done smoothly.
Whether you’re a principal employer hiring contract workers or a contractor applying for a licence, we ensure your application is completed correctly the first time. This saves you time, reduces stress, and keeps your business compliant with labour laws.
✅ Fast Process – No more running from office to office
✅ Error-Free Filing – We double-check every detail
✅ On-Time Submission – Avoid fines and penalties
📞 Call us now at +91 97263 65842 or visit Labourlicense.in for quick and reliable help with Form 3 and Form 5.
