Hi all,
We are a start-up company and we have some issues in hiring staff as employees as most of our employees previously were from the unorganised sector where there was no PF account created for them. Since there are unwilling to contribute any amount towards PF, we would like to hire them as consultants.
I would like to know whether there is any statute or guideline which governs hiring of staff as consultants? What are the legal implications for the same.
From India, Chennai
We are a start-up company and we have some issues in hiring staff as employees as most of our employees previously were from the unorganised sector where there was no PF account created for them. Since there are unwilling to contribute any amount towards PF, we would like to hire them as consultants.
I would like to know whether there is any statute or guideline which governs hiring of staff as consultants? What are the legal implications for the same.
From India, Chennai
Dear Vivek,
There is no law that can stop you from doing that, but it makes no sense to have almost the entire staff as consultants.
First, there would be not bonding as consultant in nature means project work or limited time employee.
Secondly, if there have never been an PF employee before and you are paying them a Basic+DA more than 15K per month, then as well, fill up form 11 and get them out of PF ambit.
Hiring all of them as consultant is not the best option.
Regards,
Ashutosh Thakre
From India, Mumbai
273There is no law that can stop you from doing that, but it makes no sense to have almost the entire staff as consultants.
First, there would be not bonding as consultant in nature means project work or limited time employee.
Secondly, if there have never been an PF employee before and you are paying them a Basic+DA more than 15K per month, then as well, fill up form 11 and get them out of PF ambit.
Hiring all of them as consultant is not the best option.
Regards,
Ashutosh Thakre
From India, Mumbai
Dear Ashutosh,
Thanks a lot. But we a have a problem doing that as the basic + DA is not more than 15000 and some of our employees are covered under the PF net. The incoming staff do not want PF accounts and even though we tried to convince them about the benefits of it, they are resolute in that they want more take home rather than future savings. Since they come from unorganised set-up earlier where there was no PF or any taxes we find it difficult to recruit these people.
That's the reason we thought we will hire them as consultants.
Thanks & regards,
Vivek
From India, Chennai
Thanks a lot. But we a have a problem doing that as the basic + DA is not more than 15000 and some of our employees are covered under the PF net. The incoming staff do not want PF accounts and even though we tried to convince them about the benefits of it, they are resolute in that they want more take home rather than future savings. Since they come from unorganised set-up earlier where there was no PF or any taxes we find it difficult to recruit these people.
That's the reason we thought we will hire them as consultants.
Thanks & regards,
Vivek
From India, Chennai
It is not a question of whether the employees like it or not; it is a question of law and its compliance. Please keep that in mind.
Besides if you contravene the PF law in particular, the firm's owners / directors / partners are exposed to the risk of prosecution and can even be arrested. Fines are heavy.
Consider these consequences also before taking a decision.
From India, Pune
Besides if you contravene the PF law in particular, the firm's owners / directors / partners are exposed to the risk of prosecution and can even be arrested. Fines are heavy.
Consider these consequences also before taking a decision.
From India, Pune
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