2. Re-Characterisation of Independent Contractors as Employees

In India, while there are no statutory laws that expressly govern reclassification or re-characterization of contractor labourers or independent contractors as employees, the primary tests (control and integration tests) have however been laid out by the courts. Also, Courts have also laid down several factors that may amount to deemed classification as mentioned in section II (a).

Further, please note that if a contract labourer is providing continuous service to the principal employer for more than 240 days in a calendar year, then the contract labourer may be deemed a permanent employee. That said, the Court will also take into account the kind of job profile/responsibilities with reference to the business of the organisation to arrive at the decision as the 240 days benchmark alone cannot be the sole criterion for evaluating whether the contract labourer should be considered as a permanent employee.