Inter-State Migrant Workmen Act Compliance: Complete Guide for HR and Contractors in India
Introduction: Why Inter-State Migrant Workmen Act Compliance Matters
India’s workforce is highly mobile. Every year, thousands of workers travel from their home states to other regions for jobs in construction, manufacturing, engineering, logistics, and infrastructure projects. These workers — known as inter-state migrant workmen — often face challenges such as delayed payments, inadequate accommodation, poor safety, and lack of legal protection.
To address these issues, the Government of India introduced the Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979. This law regulates how migrant workers are recruited, employed, and treated — ensuring their rights are protected and that employers and contractors fulfil their legal responsibilities.
For HR professionals, contractors, and compliance teams, understanding this Act is essential. Many companies unknowingly violate its provisions, risking penalties, license cancellations, and legal disputes. This guide simplifies the key compliance requirements, best practices, and responsibilities under the law — helping you stay compliant and safeguard both your workforce and business.
What is the Inter-State Migrant Workmen Act?
The Inter-State Migrant Workmen Act, 1979 aims to protect workers recruited from one state for employment in another. It sets out obligations for principal employers (the company or establishment where work is done) and contractors (who recruit and supply the workers).
The law ensures that migrant workers receive:
Medical care and travel support
The Act remains vital today as industries increasingly rely on contract labour from other regions.
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Applicability: When Inter-State Migrant Workmen Act Compliance Becomes Mandatory ?
The Act is applicable only under specific conditions. Understanding these helps HR teams and contractors determine when compliance is mandatory.
Applicability conditions:
The contractor employs five or more inter-state workers.
Workers are recruited through a contractor (not directly by the company).
Who is considered an inter-state migrant workman?
A worker qualifies as an inter-state migrant if they:
Are recruited in one state for employment in another.
Travel for employment purposes.
Are engaged for wages in a non-managerial, non-supervisory role.
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Key Definitions in Inter-State Migrant Workmen Act Compliance
Principal Employer: The person or company with ultimate control over the establishment.
Contractor: A person or agency responsible for recruiting and supplying workers.
Workman: Any person employed for wages other than in managerial or supervisory roles.
Establishment: Any place where business or work is carried out.
Registration and Licensing for Inter-State Migrant Workmen Act Compliance
Compliance begins with proper registration and licensing.
Step 1: Registration by Principal Employer
The principal employer must register the establishment with the Labour Department before engaging inter-state workers. After verification, a Certificate of Registration is issued.
Step 2: Licensing by Contractor
The contractor must obtain a license specifying the number of workers, employment duration, and terms before recruitment.
Step 3: Record Keeping & Returns
Both principal employer and contractor must maintain registers and submit regular returns to the labour authorities. Certificates and licenses must be displayed at the worksite.
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Employer Obligations Under Inter-State Migrant Workmen Act Compliance
Employers and contractors must ensure the following:
Displacement Allowance: Pay at least 50% of one month’s wages or ₹75 (whichever is higher).
Journey Allowance: Cover travel costs to and from the place of work.
Wages: Pay on time, without unauthorized deductions, and not less than the minimum wage.
Accommodation & Medical Care: Provide or arrange suitable housing and healthcare facilities.
Information Display: Post essential details like wage rates, hours, and payment dates in the workers’ language.
Contractor Duties and Documentation in Inter-State Migrant Workmen Act Compliance
Contractors have specific legal obligations under the Act:
Notify Authorities: Provide details of recruited workers to labour authorities in both the recruitment and employment states within 15 days. Any changes must also be reported.
Issue Passbooks: Each worker must receive a passbook with their photograph and details such as establishment name, employment period, wages, allowances, and deductions — in Hindi, English, or the worker’s language.
Submit Completion Form: After employment ends, submit a form confirming all dues, including return fare, have been paid.
Ensure Wage Equality: Pay equal wages to migrant workers performing similar work as local employees. If the contractor fails to pay, the principal employer must make the payment and recover it later.
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Registers, Records, and Documentation
Accurate documentation is critical for compliance and inspections.
Mandatory registers include:
Register of Contractors (Form XII)
Register of Persons Employed (Form XIII)
Service Certificates (Form XIV)
Displacement and Journey Allowance Registers (Forms XV & XVI)
Muster Roll, Wage Register, Deductions, Overtime, and Advance Registers
Registers must be:
Maintained accurately and updated regularly
Preserved for three years from the last entry
Produced on demand during inspections
Display & Notices:
Abstracts of the Act, wage rates, work hours, and payment details must be displayed clearly in English, Hindi, and the workers’ language.
Periodic Returns:
Half-yearly returns by contractors (Form XXIII) within 30 days after each half-year.
Annual returns by principal employers (Form XXIV) by 15th February each year.
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Legal Aid for Migrant Workers
Migrant workers or their legal heirs can apply for free legal aid in proceedings under the Payment of Wages Act, Minimum Wages Act, Industrial Disputes Act, or Workmen’s Compensation Act.
If the Deputy Labour Commissioner approves, an advocate will be appointed to represent the worker or their family, and all legal expenses will be covered. This provision ensures that workers can pursue their rights even if they cannot afford legal representation.
Penalties for Non-Compliance
Non-compliance can result in severe consequences:
Principal Employer: Fine up to ₹1,000 or imprisonment up to one year, or both.
Contractor: License cancellation, penalties, and prohibition from future recruitment.
Best Practices for HR & Contractors (With Practical Examples)
To ensure long-term compliance and reduce legal risks, HR teams and contractors should adopt these proven practices:
1. Conduct Quarterly Compliance Audits
Schedule regular reviews of all registers, returns, and documentation. Early detection of errors helps fix issues before inspections.
Example:
A company holds a quarterly “compliance review” day where HR checks register completeness, license validity, and allowance payment records. This internal practice prevents penalties during inspections.
2. Include Legal Clauses in Contractor Agreements
Clearly mention contractor obligations in agreements, including timelines for returns, wage payment, and penalties for non-compliance.
Example:
Contracts include a clause allowing payment deductions or termination if the contractor fails to submit documents or pay allowances on time.
3. Use Digital Compliance Tools
Track deadlines and documentation digitally. Automated reminders help ensure timely return submissions, license renewals, and record updates.
Example:
A digital compliance tracker automatically notifies HR when returns are due or when worker passbooks need updating.
4. Train Contractors and Supervisors
Conduct short workshops on legal duties, required documentation, and inspection readiness.
Example:
HR organizes bi-annual training sessions explaining how to issue passbooks, maintain registers, and prepare half-yearly returns.
5. Educate Workers About Their Rights
Provide orientation sessions explaining their rights to wages, allowances, and legal aid. Workers who understand their rights are less likely to face exploitation.
Example:
Workers receive a short handbook during onboarding explaining allowances, complaint procedures, and helpline numbers.
6. Monthly Compliance Review Meetings
Hold monthly meetings with contractors to review records, discuss any issues, and prepare for inspections.
Example:
HR and contractor teams meet at the start of every month to verify wage registers, review pending submissions, and resolve compliance gaps.
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Compliance Checklist (With Practical Scenarios)
Use this checklist to evaluate your compliance readiness. Each point includes how it works in practice:
Registration Certificate Issued: Ensure your establishment is registered before employing inter-state workers.
Example: The registration certificate is filed and displayed, ensuring smooth inspections.
Contractor License Valid: Confirm that contractor licenses are current and cover the required number of workers.
Example: HR maintains a digital calendar with renewal reminders to avoid lapses.
Passbooks Issued: Workers receive passbooks with updated employment details.
Example: Passbooks are verified and signed during monthly audits.
Allowances Paid: Displacement and journey allowances are paid as per law.
Example: Allowance payment slips are filed with wage records for inspection.
Registers Updated: All records, including wage and deduction registers, are complete and signed.
Example: Worker signatures are collected monthly, and records are certified by the principal employer.
Returns Filed on Time: All half-yearly and annual returns are submitted within the deadline.
Example: A checklist is reviewed monthly to track submission dates.
Notices Displayed: All legal notices and abstracts are visible in the workers’ language.
Example: Updated notices are displayed at entry points and common areas.
Legal Aid Info Shared: Workers are informed about their right to legal aid.
Example: Legal aid information is included in the passbook and onboarding material.
Regular Review Meetings Held: Monthly meetings with contractors help identify issues before inspections.
Example: Review reports track pending tasks, overdue filings, and action items.
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Conclusion
The Inter-State Migrant Workmen Act is not just a legal requirement — it’s a vital part of ethical workforce management. It ensures that some of the most vulnerable workers in India receive fair treatment, wages, and legal protection.
For HR teams and contractors, proactive compliance is the best defense against penalties. By integrating the best practices and checklist above into everyday operations, companies can stay audit-ready, build trust with their workforce, and maintain a strong reputation for fair employment practices.
FAQ
1. Does the Act apply to direct employees?
No. It applies when workers are recruited through a contractor.
2. What documents are required for registration?
Details of the establishment, number of workers, contractor information, and prescribed forms.
3. Can contractors hire without a license?
No. It’s illegal to recruit workers without a valid license.
4. Are allowances mandatory even if workers waive them?
Yes. Allowances cannot be waived under any circumstances.
5. What if a contractor fails to pay wages?
The principal employer must make the payment and recover it from the contractor.
✅ Final Note:
Compliance with the Inter-State Migrant Workmen Act protects not only workers but also your organization from legal, financial, and reputational risks. By adopting structured practices, maintaining accurate records, and prioritizing worker welfare, you can create a compliant, ethical, and productive workplace.