1. INTRODUCTIONContract labor is defined as workers engaged through an intermediary and there is a triangular relationship between the user companies, the contractor [including subcontractor] and the workers. Millions of workers are involved in contract labor and they generally belong to the unorganized sector, have very little bargaining power and also engage in hazardous occupations that put their health and safety at risk. They are also often denied minimum wage and have little or no job security. The contract labor system is prevalent in various economic activities in sectors such as: public, private, organized, unorganized, home-based, primary manufacturing and service sectors. Colonial capitalists had practiced an extravagant system of indentured labor in their agricultural fields, plantations, textile factories, and other businesses. Various labor inquiry committees set up by the government had called for the abolition of the contract labor system, including the first National Labor Commission and after the intrusion of the Supreme Court in 1960, the Government of India enacted the Contract Labor (Regulation and Abolition) Act, 1970, in order to regulate the employment of contract labor in certain institutions and to provide for its abolition in certain circumstances and for matters connected therewith. The constitutional validity of the Central Act and Rules was challenged before the Supreme Court in the Gammon India Limited case, which was upheld. Before the enactment of the Act, there was no specific legislation to deal with the problem of contract labor, although there were legislations like the Industrial Disputes Act, 1947, the Payment of Wages Act of 1936, etc., but none of them were specifically designed to regulate the middle of paper...... consumer satisfaction. The law should be made applicable only to the main and essential activities of the establishment with regard to the cancellation of the contract labor system. The strong or unified activities of an establishment such as maintenance and housekeeping should be outsourced and the law should make it possible to control working conditions and salaries. The principal employer should, in all cases, guarantee payment of wages to contracted workers, in accordance with applicable law, as well as other essential amenities and social benefits. Work requiring specific capabilities inaccessible within the establishment. If the financially savvy indentured labor system is not allowed to continue, commercial firms may embark on mechanical rebuilding with fewer workers, leading to a decrease in employment..