Dear All,
We have a contractor who has deposited contribution for the month of August, 14 in the month of November, 14.
And now he has submitted his bills for clearance.
Request you to please clarify:-
1- As a principal employer what are the legal obligation on us for late payment by the vendor? Shall we clear his bills?
2- What are bindation and interest charges of delay payment on the contractor?
3- Can we ask the vendor to deposit the interest by himself ?
4:- What is the role of PF office in this?
Would appreciate your prompt action on it.
Regards
Ranjeet
From India, New Delhi
11We have a contractor who has deposited contribution for the month of August, 14 in the month of November, 14.
And now he has submitted his bills for clearance.
Request you to please clarify:-
1- As a principal employer what are the legal obligation on us for late payment by the vendor? Shall we clear his bills?
2- What are bindation and interest charges of delay payment on the contractor?
3- Can we ask the vendor to deposit the interest by himself ?
4:- What is the role of PF office in this?
Would appreciate your prompt action on it.
Regards
Ranjeet
From India, New Delhi
Good Morning Mr Ranjeet ,
It is very sad and despicable that being a professional like agent/vendor/consultant delays his services thereby causing / hampering employees savings venture.
Anyways, PFO does not recognise any agent/vendor/consultant, as a principal employer it is our responsibility to pay in time.
Any delays will attract fines & penalties and a call/hearing by Asst - Commr /RPFO for enquiry.
The agent/vendor/consultant may be put on hold for non compliance, but i doubt how much amount his bill will match the fines/penalties you have to pay for.
My suggestion is the PFO work is very easy in fact instead of any agent/vendor/consultant, an HR professional should be able to do it, every thing is online.
Warm Regards,
A
From India, Mumbai
It is very sad and despicable that being a professional like agent/vendor/consultant delays his services thereby causing / hampering employees savings venture.
Anyways, PFO does not recognise any agent/vendor/consultant, as a principal employer it is our responsibility to pay in time.
Any delays will attract fines & penalties and a call/hearing by Asst - Commr /RPFO for enquiry.
The agent/vendor/consultant may be put on hold for non compliance, but i doubt how much amount his bill will match the fines/penalties you have to pay for.
My suggestion is the PFO work is very easy in fact instead of any agent/vendor/consultant, an HR professional should be able to do it, every thing is online.
Warm Regards,
A
From India, Mumbai
Dear Mr. Ranjeet
1- As a principal employer what are the legal obligation on us for late payment by the vendor? Shall we clear his bills?
Ans - As a PE your obligation is payment of contractors employee's pf/esi. Once payment in those employees name and a/c has been made your obligation is over. You can clear the bills for the months of which you are able to verify with certainty about payment of pf/esi dues of contractors employee.
2- What are bindation and interest charges of delay payment on the contractor?
Ans - interest is applied at 1%pm. damages depends on Date of Payment and is upto 3%pm. interest is binding and cannot be challenged. Damages suit is maintainable, RPFC will not clear it unless there is case of BIFR. all such suits rests with tribunal.
3- Can we ask the vendor to deposit the interest by himself ?
Ans - Yes. that would be the ideal case.
4:- What is the role of PF office in this?
Ans - in case vendor pays late, he will be liable for interest and damages. PF office will recover same from vendor. Only if vendor is able to establish that payment was late solely because of your company, the RPFC/tribunal may make you joint party to proceedings. this is very rare case.
In nutshell, once your vendor (non-exclusive & Non-dependent) pays the pf / esi for his employees & your are able to verify with certainty about CL employees pf payments , your liability is over.
regards
bhavik chheda
Chheda Consultancy Services : Consultants for Payroll Processing, Labour Laws, Provident Fund, ESIC, Professional Tax, MLWf, Shop Licence, etc in Mumbai, Maharashtra
From India, Pune
1- As a principal employer what are the legal obligation on us for late payment by the vendor? Shall we clear his bills?
Ans - As a PE your obligation is payment of contractors employee's pf/esi. Once payment in those employees name and a/c has been made your obligation is over. You can clear the bills for the months of which you are able to verify with certainty about payment of pf/esi dues of contractors employee.
2- What are bindation and interest charges of delay payment on the contractor?
Ans - interest is applied at 1%pm. damages depends on Date of Payment and is upto 3%pm. interest is binding and cannot be challenged. Damages suit is maintainable, RPFC will not clear it unless there is case of BIFR. all such suits rests with tribunal.
3- Can we ask the vendor to deposit the interest by himself ?
Ans - Yes. that would be the ideal case.
4:- What is the role of PF office in this?
Ans - in case vendor pays late, he will be liable for interest and damages. PF office will recover same from vendor. Only if vendor is able to establish that payment was late solely because of your company, the RPFC/tribunal may make you joint party to proceedings. this is very rare case.
In nutshell, once your vendor (non-exclusive & Non-dependent) pays the pf / esi for his employees & your are able to verify with certainty about CL employees pf payments , your liability is over.
regards
bhavik chheda
Chheda Consultancy Services : Consultants for Payroll Processing, Labour Laws, Provident Fund, ESIC, Professional Tax, MLWf, Shop Licence, etc in Mumbai, Maharashtra
From India, Pune
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.
EPFO circular regarding TDS on Payment of Provident Fund.pdf
Due Date for payment of Employee Provident Fund.docx
Provident fund.zip