Dear All, Would like to know on the EPF/ESIC compliance by a Principal Employer in detail. It is a known fact that the PE would be liable for the PF/ESIC remittance by the vendors for the contract labourers, however please clarify on the interest/delay/damages as applicable in EPF & ESIC for the delayed remittances are the responsibility of PE or the vendor? In the real time, the notices for the interest / damages are routed by ESIC to the PE under 45G and what is the exact rule position to encounter this and the ways and means to safeguard ourselves as PE? Thanks in advance to all experts.
From India, Mumbai
From India, Mumbai
The situation is now changed. PE need not be responsible for non-compliance of statutory acts - ESI/PF - by the vendors/contractors.
From India, Aizawl
625From India, Aizawl
Dear RKN Sir, Can you help me with details, please? How to handle the notices issued on behalf of the vendor in EPF & ESIC? Is the principal amount the responsibility of the PE or not? Is the interest/delay/damages are PE responsibility or not etc?
From India, Mumbai
From India, Mumbai
If the contractor is registered as per the PF & ESI Acts, then it is a separate establishment, duly recognised under the respective statutes and accordingly would lie the responsibility. However, the inspectors take the easy way out and give notice to the PE. You can reply to them giving the registration number and the documents regarding it.
From India, Mumbai
From India, Mumbai
You, as PE shall be responsible only when you remitted the contributions to the authorities
on behalf of your contractor employees, through your own Code number. You should remit
the contribution through the code number of your contractor. If you are following this,
you need not worry.
In this connection I am also attaching an article. Please go through
From India, Aizawl
on behalf of your contractor employees, through your own Code number. You should remit
the contribution through the code number of your contractor. If you are following this,
you need not worry.
In this connection I am also attaching an article. Please go through
From India, Aizawl
Dear RKN Sir, It really helps, anything of this sort available for ESIC? If so, please help with it. TIA.
From India, Mumbai
From India, Mumbai
Dear KK!HR Sir,
Thanks for your valuable feedback/suggestion. Please help with ESIC liability part on PE, is the delay interest / damages a direct responsibility of the PE? We have been getting a notice under 45 G every year for a particular vendor and year by year the interest and damage have increased manifold. We as a PE last year received a notice and have already made good on the first notice and have paid them the Principal amount which was defaulted by the contractor and copied the contractor in the communication address available with us as the contractor is not traceable or contactable. Now again there is a notice under 45 G with increased interest and damage amount. Our consultant is of the opinion to reject/object the demand from the ESIC authority and appeal with the affidavit mentioning the facts and figures. Also, the demand is of 2018 which has already crossed five years of time as the contractor concluded his job in May 2017 itself. We do not want another notice coming up and once for all we want close this issue, please suggest.
From India, Mumbai
Thanks for your valuable feedback/suggestion. Please help with ESIC liability part on PE, is the delay interest / damages a direct responsibility of the PE? We have been getting a notice under 45 G every year for a particular vendor and year by year the interest and damage have increased manifold. We as a PE last year received a notice and have already made good on the first notice and have paid them the Principal amount which was defaulted by the contractor and copied the contractor in the communication address available with us as the contractor is not traceable or contactable. Now again there is a notice under 45 G with increased interest and damage amount. Our consultant is of the opinion to reject/object the demand from the ESIC authority and appeal with the affidavit mentioning the facts and figures. Also, the demand is of 2018 which has already crossed five years of time as the contractor concluded his job in May 2017 itself. We do not want another notice coming up and once for all we want close this issue, please suggest.
From India, Mumbai
You need to act immediately on this, as opined by your Legal team, pl challenge the notice issued to you. If the contractor had a valid ESI registration then the ESI Corporation has to go after them, it is not your responsibility at all. There is a point of law that the ESIC or EPFO need to identify the beneficiaries first of all before going after the PE, because they just cannot aggrandize their income without any liability on their part. There is also a guideline that the penalty/interest cannot be more than the principal amount.
From India, Mumbai
From India, Mumbai
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