1. INTRODUCTION Contract labor is defined as workers hiring through an intermediary and there is a triangular relationship between the user enterprises, the contractor [including subcontractor] and the workers. There are millions of workers involved in contract labor and they generally belong to the unorganized sector, have very little bargaining power and also engage in dangerous occupations that put their health and safety at risk. Furthermore, they are often denied the minimum wage and have little or no job security. Contract labor system is prevalent in various economic activities across sectors such as: public, private, organised, unorganised, home-based, primary manufacturing and services. Colonial capitalists had practiced an extravagant system of indentured labor in their labor camps, plantations, textile mills, and other enterprises. 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 intervention of the Supreme Court in 1960, the Government of India enacted the Labor Act at contract (regulation and abolition) in 1970, in order to regulate the use of Contract Labor in certain institutions and to provide for its abolition in certain circumstances and for related matters. 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 were no specific legislations to deal with the problem of indentured labour, although there were legislations like Industrial Dispute Act, 1947, Payment of Wages Act, 1936 etc., but none of them were specifically designed to regulate the... paper part......of consumer satisfaction. The law should be made applicable only to the primary and core activities of the enterprise with regards to nullifying the contractual labor system. A company's strong or unified activities such as maintenance and cleaning should be outsourced, and the law should allow for control of working conditions and wages. The Principal Employer should, in any case, guarantee the payment of the wages required by current law for contract workers, as well as other essential benefits and social security benefits. Jobs that require specific skills that are inaccessible within the factory. If the financially savvy contract labor system is not allowed to proceed, commercial enterprises may opt for mechanical reconstruction with fewer workers, resulting in decreased employment..