Contract staffing is an arrangement where a worker does the job at your site, under your supervision, but sits on third party payroll with the staffing partner for a fixed term. You control the work. We carry the employment paperwork, the statutory contributions and the compliance risk that comes with them.
Recruitment Mantra has run contract staffing solutions out of Kolkata and across India since 2006. This page sets out how our contract staffing services work, what they cost you in obligations, and when they are genuinely the right call.
Contract staffing means the employee works for you and is employed by us. We recruit them, put them on our payroll, run their salary, deposit their statutory contributions and maintain the registers. You direct their day-to-day work and release them when the contract ends, without a separation process on your own books.
| Contract staffing | Permanent hiring | Temporary staffing | |
|---|---|---|---|
| Whose payroll | Recruitment Mantra | Yours | Recruitment Mantra |
| Typical duration | 3 to 24 months, fixed term | Open-ended | Days to a few months |
| Best suited to | Funded projects, capped headcount | Core roles you keep | Peak load, events, drives |
| Statutory compliance | We handle it | You handle it | We handle it |
| Conversion to permanent | Common, at the end of term | Not applicable | Rare |
| Cost model | Salary plus service fee | Salary plus internal HR cost | Salary plus service fee |
As the staffing partner we are the employer of record and carry the statutory obligations. You remain the principal employer, which means the law still expects you to verify that we are doing it. This is not a technicality. Under the Contract Labour (Regulation and Abolition) Act, 1970, if the contractor fails to pay wages, the principal employer has to cover the shortfall.
The obligations that attach to a contract workforce in India, as of August 2026:
| Obligation | Trigger | Rate or requirement |
|---|---|---|
| Employees' Provident Fund | 20 or more persons | 12% employee and 12% employer, on wages up to Rs. 15,000 per month; the employer share splits across EPF, EPS and EDLI |
| Employees' State Insurance | 10 or more persons | 0.75% employee and 3.25% employer, for wages up to Rs. 21,000 per month, or Rs. 25,000 for persons with disability |
| CLRA registration | 20 or more contract workmen on any day in the preceding 12 months | Principal employer registers the establishment; contractor holds a licence, valid 12 months and renewable |
| Welfare facilities | Applicable establishments | Drinking water, latrines, washing facilities, first-aid, and canteens or rest rooms where prescribed |
The Employees' Provident Fund Organisation states the 12% rate and the Rs. 15,000 eligibility limit on its EPF scheme page, and the twenty-person threshold sits in Section 1(3) of the EPF and MP Act, 1952. The Employees' State Insurance Corporation gives the 0.75% and 3.25% rates, effective 1 July 2019, on its contribution page, and the Rs. 21,000 wage limit, effective 1 January 2017, on its coverage page. The Chief Labour Commissioner publishes the full text of the Contract Labour (Regulation and Abolition) Act, 1970.
One caution worth stating plainly: several states have amended the CLRA threshold upward from 20 workmen, so the number that applies to your establishment depends on the state you operate in. We confirm the applicable threshold before an engagement rather than assuming the central figure.
It works when the need is real but the headcount is not permanent:
- Project-funded roles: The budget runs for the project, not forever.
- Capped headcount: Approval exists for the spend but not for a permanent seat.
- Trial before conversion: You want to see the work before making the person permanent.
- Specialist skills for a defined phase: Migration, implementation, audit and go-live work.
- Load that spikes and drops: Peak seasons, product launches, client onboarding waves.
It works badly for roles that sit at the centre of your business and need years of institutional memory. For those, permanent recruitment is the cheaper answer over any reasonable time horizon.
Contract mandates run across the same verticals as our wider practice: BPO and KPO, BFSI, pharma, logistics and ITES, plus engineering and technology.
IT contract staffing is the largest single segment, covering PHP, Python, web application, UI and UX, robotic process automation, QA, digital marketing and graphic design roles. Those are handled alongside our IT staffing desk and can be delivered on-site, off-site or offshore. For high-volume non-technical roles, see general staffing.
Ours, for employment and payroll purposes. Yours, for day-to-day work and supervision. You remain the principal employer under the CLRA Act, which carries a duty to verify our compliance.
Yes, and it is common. Conversion at the end of the term is a normal part of the model. We agree the conversion terms upfront so it does not turn into a negotiation later.
We do, as employer of record, and the cost sits inside the quoted rate. Ask for the breakup at proposal stage so you can see what is statutory cost and what is service fee.
Tell us the roles, the duration and the location, and we will come back with a costed proposal that separates salary, statutory cost and our fee.
Call 1800 572 4510 (Monday to Saturday, 10.30am to 6.30pm) or email support@recruitmentmantra.com.