Hi All,
Pls share your valuable views with regard to PF/ESI contributions of its Sub vendors i.e.contractors. As Principal Company responsible for statutory compliances whether principal company can pay compliances on behalf of contractors who are paying delayed of PF/ESI contributions regularly.
How can we avoid the delayed payments from the contractors.
Pls give your valuable inputs to streamline the process of our organisation.
Thanks & Regards,
K.Srinivas
HR Executive
From India, Hyderabad
Pls share your valuable views with regard to PF/ESI contributions of its Sub vendors i.e.contractors. As Principal Company responsible for statutory compliances whether principal company can pay compliances on behalf of contractors who are paying delayed of PF/ESI contributions regularly.
How can we avoid the delayed payments from the contractors.
Pls give your valuable inputs to streamline the process of our organisation.
Thanks & Regards,
K.Srinivas
HR Executive
From India, Hyderabad
Under Section 40, THE PRINCIPAL EMPLOYER SHALL PAY IN RESPECT OF EVERY EMPLOYEE, WHETHER DIRECTLY EMPLOYED BY HIM OR BY OR THROUGH AN IMMEDIATE EMPLOYER, BOTH THE EMPLOYER'S CONTRIBUTION AND THE EMPLOYEE'S CONTRIBUTION.
Notwithstanding anything contained in any other enactment but subject to the provisions of this Act and the regulations, if any, made there under, the principal employer shall, in the case of an employee directly employed by him (not being an exempted employee), be entitled to recover from the employee the employee's contribution by deduction from his wages and not otherwise:
PROVIDED that no such deduction shall be made from any wages other than such as relate to the period or part of the period in respect of which the contribution is payable, or in excess of the sum representing the employee's contribution for the period.
Notwithstanding any contract to the contrary, neither the principal employer nor the immediate employer shall be entitled to deduct the employer's contribution from any wages payable to an employee or otherwise to recover it from him.
Any sum deducted by the principal employer from wages under this Act shall be deemed to have been entrusted to him by the employee for the purpose of paying the contribution in respect of which it was deducted.
The principal employer shall bear the expenses of remitting the contributions to the Corporation.
Under Section 41, A principal employer, who has paid contribution in respect of an employee employed by or through an immediate employer, shall be entitled to recover the amount of the contribution so paid (that is to say the employer's contribution as well as the employee's contribution, if any) from the immediate employer, either by deduction from any amount payable to him by the principal employer under any contract, or as a debt payable by the immediate employer. The immediate employer shall maintain register of employees employed by or through him as provided in the regulations and submit the same to the principal employer before the settlement of any amount payable under this clause. In the case referred to in sub-section (1), the immediate employer shall be entitled to recover the employee's contribution from the employee employed by or through him by deduction from wages and not otherwise, subject to the conditions specified in the proviso to sub-section (2) of section 40.
From India, Kolkata
180Notwithstanding anything contained in any other enactment but subject to the provisions of this Act and the regulations, if any, made there under, the principal employer shall, in the case of an employee directly employed by him (not being an exempted employee), be entitled to recover from the employee the employee's contribution by deduction from his wages and not otherwise:
PROVIDED that no such deduction shall be made from any wages other than such as relate to the period or part of the period in respect of which the contribution is payable, or in excess of the sum representing the employee's contribution for the period.
Notwithstanding any contract to the contrary, neither the principal employer nor the immediate employer shall be entitled to deduct the employer's contribution from any wages payable to an employee or otherwise to recover it from him.
Any sum deducted by the principal employer from wages under this Act shall be deemed to have been entrusted to him by the employee for the purpose of paying the contribution in respect of which it was deducted.
The principal employer shall bear the expenses of remitting the contributions to the Corporation.
Under Section 41, A principal employer, who has paid contribution in respect of an employee employed by or through an immediate employer, shall be entitled to recover the amount of the contribution so paid (that is to say the employer's contribution as well as the employee's contribution, if any) from the immediate employer, either by deduction from any amount payable to him by the principal employer under any contract, or as a debt payable by the immediate employer. The immediate employer shall maintain register of employees employed by or through him as provided in the regulations and submit the same to the principal employer before the settlement of any amount payable under this clause. In the case referred to in sub-section (1), the immediate employer shall be entitled to recover the employee's contribution from the employee employed by or through him by deduction from wages and not otherwise, subject to the conditions specified in the proviso to sub-section (2) of section 40.
From India, Kolkata
Better to get a sub-code and deposit the contribution of the contract workmen in that sub-code or else engage an Agency for legal compliance in the engagement of Contractors and contract workmen.
N Nataraajhan, Sakthi Management Services (Hp:+919483517402 ; e-mail :
)
From India, Bangalore
N Nataraajhan, Sakthi Management Services (Hp:+919483517402 ; e-mail :
From India, Bangalore
1. Sir, the employer can deposit the contribution under ESI Act, 1948 on the same pattern /procedure as he is depositing in respect of his direct employees. There is no special procedure laid down for compliance in respect of employees of contractors.
2. However, in order to prove that the compliance has been made correctly in respect of said contractor employees, the principal employer, in my opinion, should deposit the said contribution by separate challan / separate online procedure and also retain some records/copies of records of payment of wages etc. by the said contractor so that at the time of verification of records by the SSO/Inspection Authorities, the employer may be able to prove correct compliance. .
From India, Noida
2. However, in order to prove that the compliance has been made correctly in respect of said contractor employees, the principal employer, in my opinion, should deposit the said contribution by separate challan / separate online procedure and also retain some records/copies of records of payment of wages etc. by the said contractor so that at the time of verification of records by the SSO/Inspection Authorities, the employer may be able to prove correct compliance. .
From India, Noida
If in case the Principal Employer deposit the PF / ESI contribution of the contract workmen in his Code and in the absence of Regn / Licence as per CLRA Act,and proper records like attendance, wages registers etc., Courts may decide the contract workmen as direct workmen of the Company. Therefore it is advisable to get sub-codes or atleast to deposit the contribution through separate challans.
Regards
N Nataraajhan, Sakthi Management Services (Hp:+ 91 94835 17402 ; e-mail :)
From India, Bangalore
Regards
N Nataraajhan, Sakthi Management Services (Hp:+ 91 94835 17402 ; e-mail :
From India, Bangalore
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Principal employer liable if contractor fails to pay wages to workers Delhi High Court Judgement.pdf