Hi Friends,
We are an apparel manufacturing facility doing export business. We employee around 3000 people. For some specific operations we hire outside contractors who will bring in their machines to our factory and do the specific speciallised operations. If their number of workers working in our factory is less than 10, does we need to deduct ESI and PF for their workers as principal employer?
-Srinaren
From India, Bangalore
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17We are an apparel manufacturing facility doing export business. We employee around 3000 people. For some specific operations we hire outside contractors who will bring in their machines to our factory and do the specific speciallised operations. If their number of workers working in our factory is less than 10, does we need to deduct ESI and PF for their workers as principal employer?
-Srinaren
From India, Bangalore
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Dear Srinaren,
Yes, you have to deduct the ESIC & PF as you are the principal employer and are covered under These acts.
The contractor automatically gets covered iin the act.
If its a long term contract, you can ask the contractor to make deductions and maintain the books.
If its a short term contract then PF is not necessary but please make esic deductions from the payment upto 1.75 % and pay it through the regular challan.
From India, Pune
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Yes, you have to deduct the ESIC & PF as you are the principal employer and are covered under These acts.
The contractor automatically gets covered iin the act.
If its a long term contract, you can ask the contractor to make deductions and maintain the books.
If its a short term contract then PF is not necessary but please make esic deductions from the payment upto 1.75 % and pay it through the regular challan.
From India, Pune
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Hi Viraj,
Thanks for your inputs. But, we will pay the contractor a consolidated bill and he will disburse the wages to his workers. If we deduct 1.75% which is employees contribution, what about employer's contribution of 4.75%?
Also, one more clarification required regarding the contractor is giving us less than 10 workers and do we have to deduct the ESI?
Yes, this is for a short term contract and I would like to know is there any notification that PF not to be deducted for short term contracts?? If so I would like to see that notification.
-Srinaren
From India, Bangalore
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Thanks for your inputs. But, we will pay the contractor a consolidated bill and he will disburse the wages to his workers. If we deduct 1.75% which is employees contribution, what about employer's contribution of 4.75%?
Also, one more clarification required regarding the contractor is giving us less than 10 workers and do we have to deduct the ESI?
Yes, this is for a short term contract and I would like to know is there any notification that PF not to be deducted for short term contracts?? If so I would like to see that notification.
-Srinaren
From India, Bangalore
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(Fact Check Failed/Partial)-The employer is responsible for both employee and employer contributions for ESI and PF, even for less than 10 workers. No exemption for short-term contracts.
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Dear Srinaren,
If there is a contractor he needs to submit documents to your pertaining to ESIC & PF payments from his side.
If he doesnt do say and doesnt pay then you as a principal employer are responsible for it.
Even during inspection the labour ispectors will refer to bills and ask you wether the ESIC & Pf has been paid for the labour owrk done.
Please check the bill if the contractor is charging you esic in the bill, if yes then it is his responsibility to pay and your responsibility to ensure he pays.
If not you deduct and pay 4.75 % from your pocket as you are the principal employer. Normally contractors charge the principal employers this amount in the bill
From India, Pune
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If there is a contractor he needs to submit documents to your pertaining to ESIC & PF payments from his side.
If he doesnt do say and doesnt pay then you as a principal employer are responsible for it.
Even during inspection the labour ispectors will refer to bills and ask you wether the ESIC & Pf has been paid for the labour owrk done.
Please check the bill if the contractor is charging you esic in the bill, if yes then it is his responsibility to pay and your responsibility to ensure he pays.
If not you deduct and pay 4.75 % from your pocket as you are the principal employer. Normally contractors charge the principal employers this amount in the bill
From India, Pune
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(Fact Check Failed/Partial)-The user reply is partially correct. As a principal employer, you are responsible if the contractor fails to comply with ESIC and PF. However, the rate for PF is generally 12% (not 4.75%) of the basic salary. Ensure compliance.
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Hi,
We are a manufacturing company. We want to use approx 40 labor's through contractor. Than what a responsibility about P.F. & ESI for those labors as we are a principle employer.
We have to deduct the P.F. & ESI from the contractor payment or not ? Who will give the employer contribution? Company or contractor ? Who will mentain the P.F & ESI contribution deposit work contractor or company ?
From India, Guwahati
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We are a manufacturing company. We want to use approx 40 labor's through contractor. Than what a responsibility about P.F. & ESI for those labors as we are a principle employer.
We have to deduct the P.F. & ESI from the contractor payment or not ? Who will give the employer contribution? Company or contractor ? Who will mentain the P.F & ESI contribution deposit work contractor or company ?
From India, Guwahati
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(Fact Checked)-[response] Yes, the user reply is correct. As the principal employer, you are responsible for deducting and depositing PF and ESI contributions for contract labor. The contractor should make deductions for long-term contracts and maintain records. For short-term contracts, ESIC deductions are necessary, not PF. (1 Acknowledge point)
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Yes Vidya, you will be reponsible for the contribution of PF & ESI being a principle employer. if the contractors have their own separate code of both ESI & PF then, they need to deposit the same and do complaince in their own code, however they charge the amount from you in monthly bil( its a matter of agreement B/w you and contractorss) l. In case they do not have own code then Principle employer need to deposit the same in its own code.
they will be employee of the contractors but are working for you and in your establishment. the contractor need to maintained all record & registers with him.
From India, Delhi
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they will be employee of the contractors but are working for you and in your establishment. the contractor need to maintained all record & registers with him.
From India, Delhi
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(Fact Check Failed/Partial)-The user's reply is partially correct. As a principal employer, the responsibility for PF and ESI contributions lies with the principal employer. The contractor can maintain records but ultimate responsibility remains with the principal employer. However, the details about the contractor having their own code and compliance are inaccurate.
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Dear In each month the contractors attached the PF and ESI challan with the Invoice are bill
From India, Coimbatore
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From India, Coimbatore
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(Fact Check Failed/Partial)-The user's reply is incorrect. As the principal employer, you are responsible for deducting ESI and PF for contractors' workers regardless of the number of workers. Please ensure compliance.
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Hi All,
I would like to inform you that as a Principal employer, if any contractor is not providing ESI and Pf facility to their employees, then Principal employer will be liable the same.
If any contractor is providing RF and ESI benefits to employees then we need to collect the monthly challan with detail for PF and ESIC and Copy of EPF Annual Return alongwith 3A and 6A for further clarification.....In case of ESIC we need to collect the copy of challan and Half yearly return for the prescribed period to reduce the responsibility and fulfill the statutory requirements..
If any contractor is not paying ESIC contribution then as a principal employer we need to deduct 6.5% from contractor's bill i.e. 4.75% for employer's share and 1.75% employee's share. We can follow the same process in case of PF also..
Thanks & Regards
Sunil Sharma
Email:
V3S Group
From India, New Delhi
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I would like to inform you that as a Principal employer, if any contractor is not providing ESI and Pf facility to their employees, then Principal employer will be liable the same.
If any contractor is providing RF and ESI benefits to employees then we need to collect the monthly challan with detail for PF and ESIC and Copy of EPF Annual Return alongwith 3A and 6A for further clarification.....In case of ESIC we need to collect the copy of challan and Half yearly return for the prescribed period to reduce the responsibility and fulfill the statutory requirements..
If any contractor is not paying ESIC contribution then as a principal employer we need to deduct 6.5% from contractor's bill i.e. 4.75% for employer's share and 1.75% employee's share. We can follow the same process in case of PF also..
Thanks & Regards
Sunil Sharma
Email:
V3S Group
From India, New Delhi
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(Fact Check Failed/Partial)-The user reply contains inaccuracies. As per the law, the principal employer is responsible for ensuring ESI and PF compliance for all contract workers, regardless of the number. Failure to do so can lead to penalties. It is essential to maintain compliance in all cases.
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I want to Know that PF and Esi is applicable to any Management Trainee to whome only Stipend is paid Rajesh Kumar Kolkata
From India, Mumbai
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From India, Mumbai
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(Fact Checked)-The Employees' State Insurance (ESI) Act and the Provident Fund (PF) Act apply to all employees, including trainees receiving a stipend. Both ESI and PF deductions are applicable. (1 Acknowledge point)
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yes we want to pay ESI to the employee working as Mgmnt Trainee also. Either the cost of the same can absorb by the employer in considering the stipend.. Nimesh Paul STRINGZ COCHIN 0484-3190888
From India, Kochi
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From India, Kochi
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(Fact Check Failed/Partial)-The reply is partially correct. PF and ESI are applicable to Management Trainees receiving stipends. The employer can absorb the cost but compliance is necessary.
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CiteHR.AI
(Fact Check Failed/Partial)-The user's reply is partially correct. They need to deduct both ESIC and PF for the contractor's workers, regardless of the number. PF is necessary for both short and long-term contracts. For ESIC, deductions are required for short-term contracts as well. Ensure compliance.