Dear Seniors,
Myself working in reputed electronics industry, recently we had a problem face during contract workmen, the problem is the workers come for fabrication work not having PF & ESI and they are not having any registration as such in that case what should be done? If we have to cover them under PF and ESi they will be working for only few days then will not going to return back. Kindly help in this regard and I need answer to my Management.
From India, Mysore
2Myself working in reputed electronics industry, recently we had a problem face during contract workmen, the problem is the workers come for fabrication work not having PF & ESI and they are not having any registration as such in that case what should be done? If we have to cover them under PF and ESi they will be working for only few days then will not going to return back. Kindly help in this regard and I need answer to my Management.
From India, Mysore
If the fabrication work is connected with the work of the company, the labour charges will attract ESI and EPF. It is payable by the employer (you) even if you have engaged the workers for a day. Therefore, while making payments to the contractor take a bifurcation of the amount paid to his workers and his service charges. If the total bill includes materials costs then that should also be taken separately. Then you may work out 6.5% for ESI and 13.16% towards PF and deduct that amount from the bill and pay the remaining only to the contractor. The amounts deducted can be remitted along with your own employees payments. Since the payments are online, you have to enroll the workers and then pay it. Enrolling the workers shall be done under your own registration.
If, however, the labour charges per worker is more than 6500 for the whole month you can exclude them from PF and similarly if the wages exceed Rs 15000, you can avoid payment of ESI also. Please do a calculation based on the daily rate/ weekly rate and find if this will come to 6500 or 15000, as the case may be and decide accordingly. Most important thing is that in such cases you have to keep the record of their payment of wages so that in future during the course of an inspection by ESI/ PF authorities you can say that you did not deduct and pay ESI/PF because their wages had crossed the ceiling.
Regards,
Madhu.T.K
From India, Kannur
If, however, the labour charges per worker is more than 6500 for the whole month you can exclude them from PF and similarly if the wages exceed Rs 15000, you can avoid payment of ESI also. Please do a calculation based on the daily rate/ weekly rate and find if this will come to 6500 or 15000, as the case may be and decide accordingly. Most important thing is that in such cases you have to keep the record of their payment of wages so that in future during the course of an inspection by ESI/ PF authorities you can say that you did not deduct and pay ESI/PF because their wages had crossed the ceiling.
Regards,
Madhu.T.K
From India, Kannur
Dear Sir,le
Thank you for your valuable time.My another constraint is that p articular worker team of worker will be for shorter period may be a week and once they left again we need to close his pf and esi account. In this regard whether how we can make him the payment of withdrawal. Can he able to withdraw the payment if yes how?. Whether it can be possible to open pf account for 2 or 3 days and close the same in that particular month itself?. Kindly help me in this regard.
From India, Mysore
Thank you for your valuable time.My another constraint is that p articular worker team of worker will be for shorter period may be a week and once they left again we need to close his pf and esi account. In this regard whether how we can make him the payment of withdrawal. Can he able to withdraw the payment if yes how?. Whether it can be possible to open pf account for 2 or 3 days and close the same in that particular month itself?. Kindly help me in this regard.
From India, Mysore
You can not close the PF account. He can take the PF registration No. and use it when he gets another engagement somewhere else by transferring the amounts. Though it is not practical with regard to PF, he can retain the registration of ESI and start getting ESI medical benefits free of cost. For this he can take a printout of the temporary Id card when you register him and get the photograph of himself with his family and dependents attested by you and then take the smart card from thee ESI branch office. Whenever he gets employed in companies like yours he can ask the Executive in the Personnel Department of that company to remit the ESI in his number since he is already registered. He can retain the ESI No, it is employee specific.
From the part of employer, once an employee (casual) employee is engaged, register him and pay his contribution. If he is not engaged again next month, forget about it, mark his attendance as zero and contribute nothing since he was not paid any wages. That's all.
PF can also be done like this but since PF is not employee specific but employer specific it is not practically possible to transfer the PF account every time when he is engaged in different establishments. Even one transfer takes a lot of time, just remember how is it possible to have multiple transfers. At the same time, for persons like wage earners, I don't think that PF will attract because you will not get a fabricator for less than 216 (6500/30) per day. Therefore, they must be engaged on a wages of more than 6500 when computed monthly and accordingly remove them from the cover.
Madhu.T.K
From India, Kannur
From the part of employer, once an employee (casual) employee is engaged, register him and pay his contribution. If he is not engaged again next month, forget about it, mark his attendance as zero and contribute nothing since he was not paid any wages. That's all.
PF can also be done like this but since PF is not employee specific but employer specific it is not practically possible to transfer the PF account every time when he is engaged in different establishments. Even one transfer takes a lot of time, just remember how is it possible to have multiple transfers. At the same time, for persons like wage earners, I don't think that PF will attract because you will not get a fabricator for less than 216 (6500/30) per day. Therefore, they must be engaged on a wages of more than 6500 when computed monthly and accordingly remove them from the cover.
Madhu.T.K
From India, Kannur
Dear Yogesh ji,
When you engage any labour contractor / contractor who is having no PF / ESI registration and such contractor is doing the work in your premises or under your supervision control, you are responsible and liable for PF / ESI compliance of the contract labours who are working in your premises or working under your supervision control even such labour work even for one day.
You can exclude the employee from ESI as stated by Madhu ji but while excluding employee from PF, you have to be very careful. You can not exclude all the employees drawing Basic+DA more than Rs. 6500/- from PF. There are certain conditions.
Now, your query on withdrawal/ refund. There is no withdrawal/ refund of ESI contribution paid. Withdrawal/ refund / transfer of PF accumulation is not your botheration unless you get an application to that effect from individual employee.
This posting is done by me hurriedly. Any thing wrong in it, Seniors please draw my attention.
From India, Mumbai
When you engage any labour contractor / contractor who is having no PF / ESI registration and such contractor is doing the work in your premises or under your supervision control, you are responsible and liable for PF / ESI compliance of the contract labours who are working in your premises or working under your supervision control even such labour work even for one day.
You can exclude the employee from ESI as stated by Madhu ji but while excluding employee from PF, you have to be very careful. You can not exclude all the employees drawing Basic+DA more than Rs. 6500/- from PF. There are certain conditions.
Now, your query on withdrawal/ refund. There is no withdrawal/ refund of ESI contribution paid. Withdrawal/ refund / transfer of PF accumulation is not your botheration unless you get an application to that effect from individual employee.
This posting is done by me hurriedly. Any thing wrong in it, Seniors please draw my attention.
From India, Mumbai
Last week the Employees Provident Fund Organisation has come up with a new proposal of allotting Permanent Account Numbers to members which will enable them to continue with the same account when they change employment, like that of ESI. With this, the troubles associated with transfer can be avoided.
Madhu.T.K
From India, Kannur
Madhu.T.K
From India, Kannur
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PF & ESI.zip
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