Factories in which ten or more workers are employed with power being used in the manufacturing process . and factories which are engaging twenty or more workers without using power in manufacturing process need to be registered under the Factories Act, 1948 The importance of labour licence for contractors can be seen in the The Contract Labour (Regulation and Abolition) 1970 Act,  It applies to any establishment in which twenty or more workmen are employed on any day of the accounting year as contract labour.