The incident took place yesterday at Shahdara village when the labourer, identified as Ramesh, hit contractor Kartik's head with a hammer while he was explaining work to labourers at the construction site, they said.
Karthik was rushed to a private hospital where he was declared brought dead, police said.
Search is on for Ramesh, who absconded after committing the crime, they said, adding that it is not yet known why the labourer killed Karthik.