Vendor Audit Checklist

Reviewed 19 September 2026. The four Labour Codes came into force on 21 November 2025, and Central Rules were notified in May 2026. State rules are still being notified. Thresholds and procedures below reflect the Central position; confirm your state's status before acting. This guide is general information, not legal advice.

Plan the audit

A focused audit beats a broad one.

Define the scope: sites, period and compliance areas
Pull the contractor's register, licences and previous findings
Agree the date, attendees and documents required
Choose a sampling method for workers and monthsFor example, a fixed number of workers across departments and three sampled months.

Verify standing and licences

Start with the basics.

Confirm identity, PAN, GST and constitution documents
Confirm the licence is valid, correct for the site, and covers the worker count
Confirm EPF, ESIC, Professional Tax and LWF registrations
Confirm insurance policies are current and cover deployed workers

Test the documents

Look for consistency across records.

Match the worker list to attendance, wage register and payslips
Match EPF and ESIC challans to the worker listCheck months, amounts and covered workers.
Confirm wages meet the minimum or floor wage and were paid by bank transfer
Check overtime, bonus and leave records
Check that statutory registers are maintained in the prescribed format

Verify on site

Records are only half the picture.

Count workers on site and compare to the register
Interview a sample of workers on wages, hours and documentsDo it away from supervisors.
Inspect safety equipment, PPE and site conditions
Check welfare facilities and who provides them

Rate the findings

Make severity explicit.

Classify each finding as critical, major or minorCritical means a legal breach or a safety risk to workers.
Attach evidence to every finding
Agree the facts with the contractor before closing the meeting

Corrective action and closure

An audit is only useful if findings close.

Agree corrective actions with an owner and a date for each
Set the right consequence for repeat or critical findingsPayment holds, suspension of mobilisation or termination rights should be in the contract.
Verify closure with evidence, not assurance
Feed results into the contractor's risk score

Plan the audit

Verify standing and licences

Test the documents

Verify on site

Rate the findings

Corrective action and closure

Keep going

Contractor Compliance Checklist

Contract Labour Guide (CLRA to OSH Code)

Contractor Onboarding Checklist

Run audits and track findings in one place