Dear Ashwini R & All
Please note the following :
1. Sec 2(12) has been amended - As per this, factories employing 10 or more have to cover employees under ESI
2. PF Remains to be 20 persons (if companies want to cover voluntarily even if the number is less than 20, they may do so)
3. Ms Ashwini - as you say, your company has 15 persons. Even if their salary is above Rs.15,000/-, as you have already 15 persons working, you may apply for ESI to cover your company under ESI
4. You may take security and house keeping personnel even if you do not have ESI and PF coverage. However, it is better if you engage these persons under contract agency who has ESI and PF coverage if you are really concerned.
5. If you take these persons under your company roll, then your numbers will reach the eligibility limit for both ESI and PF if you are taking more than 4 persons (as you say you have already 15 persons).
6. Even after taking house keeping and security personnel, if your number is <20 then you may still appoint them on company rolls, but apply for ESI code and later apply for PF code after reaching 20. I repeat again, your company can take PF coverage voluntarily.
7. For coverage under ESI, you need not worry whether persons are drawing <15000 or >15000. It is the number of persons employed that matters for coverage and not the salary at the time of applying for ESI code.
Hope the matter is clear.
Regards
K.Ramachandra
Bangalore
8Please note the following :
1. Sec 2(12) has been amended - As per this, factories employing 10 or more have to cover employees under ESI
2. PF Remains to be 20 persons (if companies want to cover voluntarily even if the number is less than 20, they may do so)
3. Ms Ashwini - as you say, your company has 15 persons. Even if their salary is above Rs.15,000/-, as you have already 15 persons working, you may apply for ESI to cover your company under ESI
4. You may take security and house keeping personnel even if you do not have ESI and PF coverage. However, it is better if you engage these persons under contract agency who has ESI and PF coverage if you are really concerned.
5. If you take these persons under your company roll, then your numbers will reach the eligibility limit for both ESI and PF if you are taking more than 4 persons (as you say you have already 15 persons).
6. Even after taking house keeping and security personnel, if your number is <20 then you may still appoint them on company rolls, but apply for ESI code and later apply for PF code after reaching 20. I repeat again, your company can take PF coverage voluntarily.
7. For coverage under ESI, you need not worry whether persons are drawing <15000 or >15000. It is the number of persons employed that matters for coverage and not the salary at the time of applying for ESI code.
Hope the matter is clear.
Regards
K.Ramachandra
Bangalore
Dear Ashwini,
Its compulsory as per the Act. If you dont want to compy from company side its beter tel the outsoursed agency to cover them under ESI & PF.
but you have keep the records whenever there is inspection.
Ramnath
From India, Bangalore
Its compulsory as per the Act. If you dont want to compy from company side its beter tel the outsoursed agency to cover them under ESI & PF.
but you have keep the records whenever there is inspection.
Ramnath
From India, Bangalore
Dear Ashwini,
Please clarify what do you mean by "getting only half of the amount from the agency'
Do you mean, the agency is paying only half of the salary from the amount what you are paying to the labours?
- There is no problem in taking the persons on your roll; it is your management's decision.
- Before that you may enforce the agency to pay the amount in full what you pay him - hope you are giving him margin or service charge over and above the amount payable to the labours?
- He has to take only the margin and pay the statutory amounts and cannot pay half salary to the persons.
If your questions are more specific, I can address them.
Regards
K.Ramachandra
Bangalore
Please clarify what do you mean by "getting only half of the amount from the agency'
Do you mean, the agency is paying only half of the salary from the amount what you are paying to the labours?
- There is no problem in taking the persons on your roll; it is your management's decision.
- Before that you may enforce the agency to pay the amount in full what you pay him - hope you are giving him margin or service charge over and above the amount payable to the labours?
- He has to take only the margin and pay the statutory amounts and cannot pay half salary to the persons.
If your questions are more specific, I can address them.
Regards
K.Ramachandra
Bangalore
Dear Ashwini
Then the Agency is the culprit. Please take following actions
1. call the agency and advise to arrange to pay full salary as the company is paying him full.
2. He has to show the wage register (Form 22) for having recorded full salary, deduction of PF and ESI and the concerned worker's signature. This has to be a routine, everymonth check up by you/concerned
3. issue him a show cause notice as to why he has not paid the amount even though the company has paid
4. If he does not pay ESI and PF even after your company has paid, your company will be liable to comply with ESI/PF. hence advise him to remit all arrears of ESI and PF and advise him that if he does not comply with the same, the amount willbe recovered from his bills
5. Call for ESI and PF numbers of all the workers engaged by him to check whether they have been alloted PF and ESI numbers.
6. If he continues to repeat this illegal act, terminate him and engage a good contractor
Reply in case of doubts,
Regards
K.Ramachandra
Then the Agency is the culprit. Please take following actions
1. call the agency and advise to arrange to pay full salary as the company is paying him full.
2. He has to show the wage register (Form 22) for having recorded full salary, deduction of PF and ESI and the concerned worker's signature. This has to be a routine, everymonth check up by you/concerned
3. issue him a show cause notice as to why he has not paid the amount even though the company has paid
4. If he does not pay ESI and PF even after your company has paid, your company will be liable to comply with ESI/PF. hence advise him to remit all arrears of ESI and PF and advise him that if he does not comply with the same, the amount willbe recovered from his bills
5. Call for ESI and PF numbers of all the workers engaged by him to check whether they have been alloted PF and ESI numbers.
6. If he continues to repeat this illegal act, terminate him and engage a good contractor
Reply in case of doubts,
Regards
K.Ramachandra
Dear Ashwini
You can make direct payment to security and house keeping workers through bank payment by paying the manpower supplying agency. (I think Wipro at Hyderabad is paying for their security directly and to that agency they pay 10% profit as service charges and other tax applicable) In this case you need not to have complete administrative control over them, but obviously you will have the functional control over the entire workers.
Further they can be paid in stipulated time, as the contractors are effecting their payment after a very long time delay.
Please review your agreement with those agency whoever supplying the manpower for house keeping and security services and start as early as possible. Your organisations security and house keeping will be maintained in very good condition by this kind of act.
With warm regards.
S. Bhaskar
9099024667
From India, Kumbakonam
You can make direct payment to security and house keeping workers through bank payment by paying the manpower supplying agency. (I think Wipro at Hyderabad is paying for their security directly and to that agency they pay 10% profit as service charges and other tax applicable) In this case you need not to have complete administrative control over them, but obviously you will have the functional control over the entire workers.
Further they can be paid in stipulated time, as the contractors are effecting their payment after a very long time delay.
Please review your agreement with those agency whoever supplying the manpower for house keeping and security services and start as early as possible. Your organisations security and house keeping will be maintained in very good condition by this kind of act.
With warm regards.
S. Bhaskar
9099024667
From India, Kumbakonam
Dear Ashwini
I just want to clarify on Mr Bhaskar's view:
1. Contractors engaged and payments are made through the contractor to keep the principal employer (your company) safe from legal bindings so that the company will not have any liability of gratuity, regularisation of employment at later stages, obligation to maintain records, etc.etc.
2. You may pay directly, but if you have taken them through contractor, you have to pay on their wage sheet only and not on your company's account or wage sheet.
3. Ofcourse, as long as they continue to be on the rolls of contractor, you have to pay service charges. Services charges are paid normally @ 10% or 12% on the overall bill amount (i.e. including ESI and PF margins) and some companies have a fixed amount per day or per month rate as service charges or per labour. You may have any such practices but it should be after negotating with the contractor and agreed mutually.
4. Also when you are paying service charges to the contractor and the workers are on his rolls, why do you wish to take the trouble of paying salary by you? All that is required is you have to enforce your authority on contractor as principal employer !!
Hope the matter is clear
Regards
K.Ramachandra
Bangalore
I just want to clarify on Mr Bhaskar's view:
1. Contractors engaged and payments are made through the contractor to keep the principal employer (your company) safe from legal bindings so that the company will not have any liability of gratuity, regularisation of employment at later stages, obligation to maintain records, etc.etc.
2. You may pay directly, but if you have taken them through contractor, you have to pay on their wage sheet only and not on your company's account or wage sheet.
3. Ofcourse, as long as they continue to be on the rolls of contractor, you have to pay service charges. Services charges are paid normally @ 10% or 12% on the overall bill amount (i.e. including ESI and PF margins) and some companies have a fixed amount per day or per month rate as service charges or per labour. You may have any such practices but it should be after negotating with the contractor and agreed mutually.
4. Also when you are paying service charges to the contractor and the workers are on his rolls, why do you wish to take the trouble of paying salary by you? All that is required is you have to enforce your authority on contractor as principal employer !!
Hope the matter is clear
Regards
K.Ramachandra
Bangalore
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