The Indian labour ministry has proposed a new framework for staffing firms to include issuing a national license mandate. The Indian labour ministry believes a single license will make it easier for both large and small companies to operate, besides formalising procedures for the workforce, Economic Times reports. However, no financial threshold has been specified by the Ministry.

The Ministry is considering rollout of amendment draft to the Contract Labour and Abolition Act (CLA) soon, which will establish a new framework and mandate on staffing firm workings. According to statement made by one of the insiders, the government believes prescribing or setting a threshold will keep smaller players out of the legal framework. As of currently, staffing firms operate on low budget, while using money charged from clients to payoff the salaries of employees and for social security cover.

The current framework mandates approval for hiring contract workers, based on location or premises. Issuing a single national license will thus make it easier for larger and smaller companies to operate seamlessly.

A large number of contractual staff in India operate under traditional contractors who not only deny them of minimum wages, but also pension, death and disability benefits. As of now, 55% of public sector jobs are handled by contractors, whereas 45% of those are in the private sector.

Also read: The Indian Staffing Industry Calls for Amendments to the Contract Labour Act