We have a subcontractor, and he employs fewer than 20 contract laborers and works only for 7-8 days in a month.
1. Is ESI and PF applicable to him?
2. Can he only get registration under the Workmen's Compensation Act?
From India, Delhi
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1. Is ESI and PF applicable to him?
2. Can he only get registration under the Workmen's Compensation Act?
From India, Delhi
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Hi Friends,
This is a good question. Even I am not clear about this because it is being mentioned as less than 20 people. But I think the number of days doesn't matter in this sort of case.
So, members, please clarify our doubt on this...
Regards,
Amith R.
From India, Bangalore
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17This is a good question. Even I am not clear about this because it is being mentioned as less than 20 people. But I think the number of days doesn't matter in this sort of case.
So, members, please clarify our doubt on this...
Regards,
Amith R.
From India, Bangalore
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Dear friend, If you are covered then the employees of sub-contractor will also be covered in both Acts-ESI and PF. There is no need of Workmen compensation policy. with best wishes Lalit Kumar Gupta
From India, Lucknow
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From India, Lucknow
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Hi Lalith,
I agree with your point, but I need clarification on the employee strength, which is less than 20 in this case. As the contractor has to get it registered and provide these benefits to the employees, what can he do? Does he need to get it registered first, or how can he proceed with this?
Can you clarify on this?
Regards,
Amith R.
From India, Bangalore
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I agree with your point, but I need clarification on the employee strength, which is less than 20 in this case. As the contractor has to get it registered and provide these benefits to the employees, what can he do? Does he need to get it registered first, or how can he proceed with this?
Can you clarify on this?
Regards,
Amith R.
From India, Bangalore
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Thanks for your reply. But my query is that the subcontractor employees daily wagers on contract and they are less than 20 in number. How to get these daily wagers registered under PE act ESI act
From India, Delhi
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From India, Delhi
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There are five main issues - concept of principal employer, core and perennial work, industry restrictions, timing and location restriction, compliance philosophy, and decentralization, and high mandatory payroll deductions - that need immediate attention.
Due to these issues, there is blurred accountability with dual employer responsibility. Here I would like to clarify that the law does not recognize Sub-Contractor Only Principal Employer. Principal Employer and Contractor are responsible for statutory compliances. If the number of employees exceeds the requirement as per the PF & ESI Act, you will have to comply with it. If the contractor does not comply, the Principal Employer is liable to comply.
N N Tiwari
From India, New Delhi
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Due to these issues, there is blurred accountability with dual employer responsibility. Here I would like to clarify that the law does not recognize Sub-Contractor Only Principal Employer. Principal Employer and Contractor are responsible for statutory compliances. If the number of employees exceeds the requirement as per the PF & ESI Act, you will have to comply with it. If the contractor does not comply, the Principal Employer is liable to comply.
N N Tiwari
From India, New Delhi
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In case we have 5 subcontractors and are working on 5 different sites, and each of these subcontractor employees 6 laborers, will we need to take registration under the PF and ESI acts as the number of contract staff is more than 20, or is it not required.
From India, Delhi
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From India, Delhi
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When the employee strength is less than 20, then it's not mandatory for the subcontractor to contribute to PF & ESI. However, if the number fluctuates and at any time exceeds 20, it falls under the coverage. In such cases, if the same employees were previously employed, they must be provided with benefits retrospectively.
It is the employer's responsibility to enforce the EPF & MP Act, 1952, as subcontractors may change but the EPF department enforces regulations on the organization, not on the subcontractor.
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It is the employer's responsibility to enforce the EPF & MP Act, 1952, as subcontractors may change but the EPF department enforces regulations on the organization, not on the subcontractor.
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One has to check that ESI is applicable on that site. If it is applicable, then it is compulsory to comply. If the strength is over 10 or 20, take a sub code for that site. For P.F., if the principal employer unit is covered, one has to make compliance of P.F. by registering for P.F. from the P.F. office where the contractor's head office is located or from where they operate. If the number is below 20, then compliance should be made using the principal employer code. In any of these cases, the principal employer is responsible for each and every employee working under their name, whether they are contract labor or employees.
Regards,
Abhinav
From India, Delhi
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Regards,
Abhinav
From India, Delhi
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Thanks for your reply. But my query is that the subcontractor employees are daily wagers on contract, and they are fewer than 20 in number. How can these daily wagers be registered under the PE Act and ESI Act?
Number of contract workmen employed by your subcontractor does not matter to cover them under EPF and ESIC Acts. If the number exceeds 20, the contractor has to obtain a Labour license to run his business. EPF and ESIC are applicable even if he has only engaged one person under him. If the subcontractor has no EPF & ESIC registration numbers, the contributions could be remitted in any other service provider's name. For example, if you have engaged a contractor to carry out housekeeping, who has a registration under these EPF & ESIC, then those seven members' contributions could be remitted through the housekeeping contractor.
Regards,
Prashanth Shetty
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Number of contract workmen employed by your subcontractor does not matter to cover them under EPF and ESIC Acts. If the number exceeds 20, the contractor has to obtain a Labour license to run his business. EPF and ESIC are applicable even if he has only engaged one person under him. If the subcontractor has no EPF & ESIC registration numbers, the contributions could be remitted in any other service provider's name. For example, if you have engaged a contractor to carry out housekeeping, who has a registration under these EPF & ESIC, then those seven members' contributions could be remitted through the housekeeping contractor.
Regards,
Prashanth Shetty
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