Any contract labour if deploys 20 or more is liable to obtain license provided the principal employer issues Form V. This is regulatory requirement.
Any employee if paid Rs.10,000/- or less than irrespective of whether employed with principal employer or contract employer has to contribute to ESIC. This is statutory requirement. Both the parties are accountable and responsible to abide by the requirement.
From India, Mumbai
Any employee if paid Rs.10,000/- or less than irrespective of whether employed with principal employer or contract employer has to contribute to ESIC. This is statutory requirement. Both the parties are accountable and responsible to abide by the requirement.
From India, Mumbai
Hi,
The last answer (from Mr. Shetty) is RIGHT.
If you are a covered establishment, whether a factory or a Shops & Commercial Establishment, and you engage either a temporary coverable employee (i.e. in receipt of gross wages less than Rs. 10,000/- p.m.) or you receive a Contractor's coverable employee (i.e. in receipt of gross wages less than Rs. 10,000/- p.m.) even for a single day (in either of the cases) , you will have to register and cover such an employee under ESI for certain.
If your Contractor is independently registered establishment under the ESI act he will have to comply with ESI formailties, satisfy you about proper compliance, indemnify you against actions you may face for lapses on his part and deposit the due contributions by himself in respect of his employees. However, if this NOT the case and since you are a covered establishment (that is our original assumption) you will have to complete all ESI formalities and discharge all relevant obligations (as though the concerned employee was you employee anyway!) against your own code number and recover necessary amounts from your contractor.
I suppose the issue is now clear. I am sorry I could not respond earlier. I was out of town for a couple of days!
If you have more queries, WELCOME.
Regards
samvedan
May 9, 2007
From India, Pune
315The last answer (from Mr. Shetty) is RIGHT.
If you are a covered establishment, whether a factory or a Shops & Commercial Establishment, and you engage either a temporary coverable employee (i.e. in receipt of gross wages less than Rs. 10,000/- p.m.) or you receive a Contractor's coverable employee (i.e. in receipt of gross wages less than Rs. 10,000/- p.m.) even for a single day (in either of the cases) , you will have to register and cover such an employee under ESI for certain.
If your Contractor is independently registered establishment under the ESI act he will have to comply with ESI formailties, satisfy you about proper compliance, indemnify you against actions you may face for lapses on his part and deposit the due contributions by himself in respect of his employees. However, if this NOT the case and since you are a covered establishment (that is our original assumption) you will have to complete all ESI formalities and discharge all relevant obligations (as though the concerned employee was you employee anyway!) against your own code number and recover necessary amounts from your contractor.
I suppose the issue is now clear. I am sorry I could not respond earlier. I was out of town for a couple of days!
If you have more queries, WELCOME.
Regards
samvedan
May 9, 2007
From India, Pune
Thankyou samvedan...and others...
So waht i have understood is- even if we are employing a contractor who has less than 20 ppl in toto, and thus he does not have an ESI code, it is we who will have to deposit the ESI fr those employed labourers till the time they are with us though they are not otherwise covered by the contractor under ESI . Right?
Now if u permit may i clear one more doubt- we have another case coming up whereby an employee's basic salary is 10k and thus his PF contribution is 1200 p.m. Now he asks us to deduct his PF at 6500 basic and he is ready to give an undertaking for the same. Also he is ready that employer's contibution also may be reduced, no issues.
My querry is can we do so because as per my knowledge PF contribution once made cannot be reduced however another argument coming up is that since his basic is above 6500/- so we can go ahead. Please advise.
Rolly
From India, New Delhi
So waht i have understood is- even if we are employing a contractor who has less than 20 ppl in toto, and thus he does not have an ESI code, it is we who will have to deposit the ESI fr those employed labourers till the time they are with us though they are not otherwise covered by the contractor under ESI . Right?
Now if u permit may i clear one more doubt- we have another case coming up whereby an employee's basic salary is 10k and thus his PF contribution is 1200 p.m. Now he asks us to deduct his PF at 6500 basic and he is ready to give an undertaking for the same. Also he is ready that employer's contibution also may be reduced, no issues.
My querry is can we do so because as per my knowledge PF contribution once made cannot be reduced however another argument coming up is that since his basic is above 6500/- so we can go ahead. Please advise.
Rolly
From India, New Delhi
Hi,
Contract Labour applies when the employee strength increases 20 but the ESIC is applicable when more than 9 employees are employed. Which means you need to comply with ESIC.
for any further queries, you can write to me at
regards
Umesh
From India, Delhi
Contract Labour applies when the employee strength increases 20 but the ESIC is applicable when more than 9 employees are employed. Which means you need to comply with ESIC.
for any further queries, you can write to me at
regards
Umesh
From India, Delhi
Hi again,
Regarding that PF issues, you only have to walk forward, no backwards in labour laws. Though, you can do so but after getting his (employee's) declaration certified by the PF inspector, but who knows when this inspectors gets transferred and upon inspection this may be troublesome for your organisation. It's better not to reduce the basic to 6500 from 10000.
regards,
Umesh Chaudhary
From India, Delhi
Regarding that PF issues, you only have to walk forward, no backwards in labour laws. Though, you can do so but after getting his (employee's) declaration certified by the PF inspector, but who knows when this inspectors gets transferred and upon inspection this may be troublesome for your organisation. It's better not to reduce the basic to 6500 from 10000.
regards,
Umesh Chaudhary
From India, Delhi
hey i think i need to make my point clear...we are not talking of reducing basic but about reducing PF contribution frm 1200 to 780 ...basic remains intact and the employee is ready to giv an undertaking that he willfully desires that his PF may be deducted on 6500 basic...
rolly
From India, New Delhi
rolly
From India, New Delhi
Hi
I understood your Q and then I replied. Decreasing Basic or decreasing PF contribution is mutually parallel, so called vice-versa. You cannot do so. I am 100% sure. If you do so, and you are caught later you need to pay arrears.
thanks and regards,
Umesh
From India, Delhi
I understood your Q and then I replied. Decreasing Basic or decreasing PF contribution is mutually parallel, so called vice-versa. You cannot do so. I am 100% sure. If you do so, and you are caught later you need to pay arrears.
thanks and regards,
Umesh
From India, Delhi
Hi
I understood your Q and then I replied. Decreasing Basic or decreasing PF contribution is mutually parallel, so called vice-versa. You cannot do so. I am 100% sure. If you do so, and you are caught later you need to pay arrears.
Also his salary is Rs. 1000.00, the ESIC is also applicable, and once you set his basic to 6500, the ESIC contribution will decrease too.
thanks and regards,
Umesh
From India, Delhi
I understood your Q and then I replied. Decreasing Basic or decreasing PF contribution is mutually parallel, so called vice-versa. You cannot do so. I am 100% sure. If you do so, and you are caught later you need to pay arrears.
Also his salary is Rs. 1000.00, the ESIC is also applicable, and once you set his basic to 6500, the ESIC contribution will decrease too.
thanks and regards,
Umesh
From India, Delhi
hi umesh..
thankyou fr the patience...
Well...i hav seen many organizations restrict PF to 6500 immaterial of the fact that basic keeps rising beyond that. The only need is for mutual consent. So here also if both the parties namely employee n employer are agreeing why can the contribution not be made at 6500/- because anybody above 6500 basic is not entitled to PF compulsorily..
Hope i m clear...
rolly
From India, New Delhi
thankyou fr the patience...
Well...i hav seen many organizations restrict PF to 6500 immaterial of the fact that basic keeps rising beyond that. The only need is for mutual consent. So here also if both the parties namely employee n employer are agreeing why can the contribution not be made at 6500/- because anybody above 6500 basic is not entitled to PF compulsorily..
Hope i m clear...
rolly
From India, New Delhi
hi!! Every body
After gone through the discussion. i would like to say that there are two contribution compulsary and Voluntary the extra which is paid above the basic of Rs. 6500 is more than Rs.780 comes under voluntary contribution . so, if the employee is interested in reducing his voluntary contribution and the employee too doesn't have any problem then they can proceed with it.
Regards,
Revathi
From India
After gone through the discussion. i would like to say that there are two contribution compulsary and Voluntary the extra which is paid above the basic of Rs. 6500 is more than Rs.780 comes under voluntary contribution . so, if the employee is interested in reducing his voluntary contribution and the employee too doesn't have any problem then they can proceed with it.
Regards,
Revathi
From India
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Notification No G.S.R. 1128(E) Contract Labour (Regulation and Abolition) Central Amendment .pdf
LABOUR CONTRACT AGREEMENT.doc
Contract Labour Act.zip