Introduction

Migrant labour in India plays an important role across industries such as manufacturing, construction, logistics, retail, e-commerce, and facility management. When workers move from one state to another for employment, organisations and contractors need to understand the labour compliance requirements that govern their engagement, working conditions, and welfare.

The Inter State Migrant Workmen Act, 1979, commonly known as the ISMW Act, historically established specific obligations relating to inter-state migrant workers, including registration, contractor licensing, wages, displacement allowance, and other employment conditions. The regulatory framework has since evolved with the Occupational Safety, Health and Working Conditions Code, making it important for employers to understand both the earlier ISMW framework and the applicable requirements under the newer labour-code regime.

This guide explains ISMW Act applicability, the ISMW license and registration framework, responsibilities of contractors and principal employers, principal employer liability, and what the changing regulatory landscape means for organisations managing migrant labour and external workforces in India.

What Is the Inter State Migrant Workmen Act (ISMW Act)?

The Inter State Migrant Workmen Act, 1979, commonly referred to as the ISMW Act, was introduced to regulate the employment and conditions of service of certain workers recruited in one state for employment in another state through contractors. Its objective was to provide safeguards for inter-state migrant labour and establish responsibilities for contractors and principal employers.

Under the historical Inter State Migrant Workmen Act framework, compliance covered areas such as registration of establishments, contractor licensing, wage-related obligations, record keeping, working conditions, and worker benefits such as displacement allowance and journey allowance.

The Act also created responsibilities for both contractors and principal employers. This made ISMW compliance relevant not only to the contractor recruiting or supplying workers but also to establishments engaging inter-state migrant workers through contractors.

For enterprises managing a large external workforce, maintaining accurate worker, contractor, work-location, and compliance documentation is therefore important for managing migrant workforce obligations. BlueTree supports external workforce management through capabilities such as vendor management, worker onboarding, document management, and compliance tracking.

Inter State Migrant Workmen Act, 1979: History and Background

The Inter State Migrant Workmen Act, 1979 was introduced to address the working conditions of labourers recruited in one state and employed in another through contractors. Such workers could be particularly vulnerable because they were working away from their home state and often depended on contractors for recruitment, travel, wages, and employment arrangements.

The Inter State Migrant Workmen Act created a formal compliance framework aimed at regulating this employment model and protecting covered workers. It placed responsibilities on contractors and principal employers, including requirements relating to establishment registration, contractor licensing, wages, employment records, and prescribed worker benefits.

A notable feature of the ISMW Act was the recognition of costs associated with workers relocating for employment. The framework included provisions such as displacement allowance and journey allowance for eligible inter-state migrant workers, alongside other conditions of service.

The regulatory framework for migrant labour in India has since evolved through the Occupational Safety, Health and Working Conditions Code. Understanding the 1979 Act remains useful because it provides the background to how inter-state migrant worker protections developed and helps employers understand the transition to the newer labour-code framework.

ISMW Act Applicability: Which Establishments and Contractors Are Covered?

Under the historical Inter State Migrant Workmen Act, 1979, applicability was linked to establishments and contractors employing inter-state migrant workmen through the contractor-based recruitment model covered by the Act.

Broadly, ISMW Act applicability covered:

• Establishments: Establishments in which five or more inter-state migrant workmen were employed, or had been employed on any day during the preceding 12 months.

• Contractors: Contractors who employed five or more inter-state migrant workmen, or had employed that number on any day during the preceding 12 months.

• Covered workers: The original framework focused on workers recruited by or through a contractor in one state for employment in an establishment located in another state.

Where the Act applied, principal employers were required to register covered establishments, while contractors were subject to ISMW license requirements and other obligations relating to the employment and welfare of migrant workers.

For organisations managing migrant labour in India, correctly identifying the worker's recruitment arrangement, contractor, establishment, and work location was therefore central to determining ISMW compliance. BlueTree can support this operational visibility through external workforce onboarding, vendor management, employee work details, engagement history, and compliance documentation.

The definition and coverage of inter-state migrant workers have evolved under the newer labour-code framework, so the historical ISMW Act applicability criteria should not automatically be treated as the current compliance threshold under the OSH Code.

ISMW Act Contractor Licence: Who Needs One and How to Get It

Under the historical Inter State Migrant Workmen Act, 1979, contractors covered by the Act were required to obtain an ISMW license from the appropriate licensing authority before recruiting or employing inter-state migrant workmen for a covered establishment.

The licensing framework was intended to create accountability for contractors responsible for recruiting and managing migrant labour across state borders. Broadly, the process involved:

1. Confirming ISMW Act applicability: The contractor first needed to determine whether the establishment, workforce strength, and recruitment arrangement brought the engagement within the scope of the Act.

2. Principal employer certification: The licence application process involved certification relating to the principal employer and the establishment where the workers would be employed.

3. Submitting the licence application: The contractor was required to provide prescribed information about the establishment, nature of work, migrant workers, and employment arrangement.

4. Paying applicable fees and security: Prescribed licence fees and security requirements applied under the relevant rules.

5. Complying with licence conditions: Once the ISMW license was granted, the contractor had to comply with applicable conditions and statutory responsibilities relating to covered workers.

For principal employers working with multiple contractors, monitoring contractor documentation and compliance status is an important part of external workforce governance. BlueTree supports vendor registration, vendor onboarding, document uploads, approval workflows, vendor compliance, and work order management, helping organisations maintain structured contractor records.

The ISMW Act licensing framework described above relates to the 1979 Act. Licensing and registration requirements need to be assessed against the labour-code framework and rules currently applicable to the establishment rather than relying solely on the historical process.