The deceased labourers, identified as Ajay (22), Anil (26) and Mithlesh (31), were hired by a local contractor for for the construction of a house, SP Shimla DW Negi said.
A case has been registered against the contractor under sections 404 and 336 of IPC for causing death by negligence and endangering life of people, Negi said.
The police and fire brigade rushed to the spot upon receiving information and initiated the rescue operation.
Rains lashed Himachal Pradesh for the last two days. The labourers were caught unaware when a huge mound of earth suddenly fell on them, eye-witnesses said.
The volume of the debris was massive and the labourers were suffocated to death, police added.