Hi... My company is giving salary in cash to all employees. Now they want to transfer the salaries to the bank accounts of each individual, whether it be labour or staff. However, our company does not provide PF benefits to any employee and provides ESIC to a few employees. They are planning to convert some existing employees into Contractors. So after that, Can we provide salaries to our employees in their bank accounts if we only want to give them the ESIC benefit, not PF? If yes, How?
First of all you can not pay salaries in cash. Second, you cannot make one employee a contractor for name sake and shift all your employees under his rolls. Even if you engage a contractor, the liabilities like ESI, PF etc will be on your shoulders unless the said contractor has separate ESI and EPF registrations. Moreover, you can not engage contract labour (when you put the employees under a contractor the said employees will become contract labour) in core activities of operations and that of perennial nature. All these would end up in legal complications only. Therefore, it is advisable to enroll the eligible workers under your own ESI and EPF registrations and run the business without fear. Even under the contract of service, you have to bear the cost of wages, the cost by way of bonus, PF, ESI etc. Then what is the real benefit by having a contractor in between? Nothing per se.
From India, Kannur
4242From India, Kannur
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