Dear All,
Please let me know the responsibilities and liabilities of the principal employer in the following cases:
1. Late submission of PF contribution by the Contractor (PF paid after the 15th).
2. Late submission of ESIC contribution by the Contractor (ESIC paid after the 21st).
Feel free to contact me if any clarification is required.
Regards,
Faruk Shaikh
+91-9974768786
+91-9998022889
From India, Mumbai
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39Please let me know the responsibilities and liabilities of the principal employer in the following cases:
1. Late submission of PF contribution by the Contractor (PF paid after the 15th).
2. Late submission of ESIC contribution by the Contractor (ESIC paid after the 21st).
Feel free to contact me if any clarification is required.
Regards,
Faruk Shaikh
+91-9974768786
+91-9998022889
From India, Mumbai
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Dear Faruk,
Late submission of any statutory payment shall attract interest charges and damage charges. Therefore, failure to pay any payment to any authority by the contractor shall be the direct responsibility of the principal employer. All liability falls on the principal employer in that case. The principal employer needs to pay the respective payment to the authority, and the same can be recovered from the payment invoice of the contractor.
From India, Mumbai
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Late submission of any statutory payment shall attract interest charges and damage charges. Therefore, failure to pay any payment to any authority by the contractor shall be the direct responsibility of the principal employer. All liability falls on the principal employer in that case. The principal employer needs to pay the respective payment to the authority, and the same can be recovered from the payment invoice of the contractor.
From India, Mumbai
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Hi,
Any person employed directly or through a contractor in an establishment or in connection with the work of the establishment would also be termed as the ‘employee’ of that particular establishment as per Section 2(f) of the EPF & MP Act, 1952.
It is needless to reiterate that all the above contract employees would need to be enrolled under the PF Code Number of the establishment.
In case if such contract employees are enrolled under a separate PF code No. of the contractor, it is the principal employer’s duty to ensure that contributions at the prescribed rates are deducted and remitted by the contractor in respect of the said contract employees failing which, being the principal employer, the establishment will held liable for the payment of such contributions also.
The below are the detailed explanations on the same as per the legal provisions.
Para 30. Payment of Contribution:
1. The employer shall, in the first instance, pay both the contribution payable by himself (in this Scheme referred to as the employer’s contribution) and also, on behalf of the member employed by him directly or by or through a contractor, the contribution payable by such member (in the Scheme referred to as the member’s contribution).
2. In respect of employees employed by or through a contractor, the contractor shall recover the contribution payable by such employee (in this Scheme referred to as the member’s contribution) and shall pay to the principal employer the amount of member’s contribution so deducted together with an equal amount of contribution (in this Scheme referred to as the employer’s contribution) and also administrative charges.
3. It shall be the responsibility of the principal employer to pay both the contribution payable by himself in respect of the employees directly employed by him and also in respect of the employees employed by or through a contractor and also administrative charges.[Explanation – For the purpose of this paragraph the expression “administrative charges” means such percentage of the pay (basic wages, dearness allowance, retaining allowance, if any, and cash value of food concessions admissible thereon) for the time being payable to the employees other than an excluded employee, and in respect of which provident fund contributions are payable as the Central Government may, in consultation with the Central Board and having regard to the resources of the Fund for meeting its normal administrative expenses, fix]
Para 36-B. Duties of Contractors. :
Every contractor shall, within seven days of the close of every month, submit to the principal employer a statement showing the recoveries of contributions in respect of employees employed by or through him and shall also furnish to him such information as the principal employer is required to furnish under the provisions of the Scheme to the Commissioner.
Hope, the above information suffices the need.
In Both the cases even PF and ESI, Principle Employer Responsibility to Pay the contributions.
From India, Mumbai
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Any person employed directly or through a contractor in an establishment or in connection with the work of the establishment would also be termed as the ‘employee’ of that particular establishment as per Section 2(f) of the EPF & MP Act, 1952.
It is needless to reiterate that all the above contract employees would need to be enrolled under the PF Code Number of the establishment.
In case if such contract employees are enrolled under a separate PF code No. of the contractor, it is the principal employer’s duty to ensure that contributions at the prescribed rates are deducted and remitted by the contractor in respect of the said contract employees failing which, being the principal employer, the establishment will held liable for the payment of such contributions also.
The below are the detailed explanations on the same as per the legal provisions.
Para 30. Payment of Contribution:
1. The employer shall, in the first instance, pay both the contribution payable by himself (in this Scheme referred to as the employer’s contribution) and also, on behalf of the member employed by him directly or by or through a contractor, the contribution payable by such member (in the Scheme referred to as the member’s contribution).
2. In respect of employees employed by or through a contractor, the contractor shall recover the contribution payable by such employee (in this Scheme referred to as the member’s contribution) and shall pay to the principal employer the amount of member’s contribution so deducted together with an equal amount of contribution (in this Scheme referred to as the employer’s contribution) and also administrative charges.
3. It shall be the responsibility of the principal employer to pay both the contribution payable by himself in respect of the employees directly employed by him and also in respect of the employees employed by or through a contractor and also administrative charges.[Explanation – For the purpose of this paragraph the expression “administrative charges” means such percentage of the pay (basic wages, dearness allowance, retaining allowance, if any, and cash value of food concessions admissible thereon) for the time being payable to the employees other than an excluded employee, and in respect of which provident fund contributions are payable as the Central Government may, in consultation with the Central Board and having regard to the resources of the Fund for meeting its normal administrative expenses, fix]
Para 36-B. Duties of Contractors. :
Every contractor shall, within seven days of the close of every month, submit to the principal employer a statement showing the recoveries of contributions in respect of employees employed by or through him and shall also furnish to him such information as the principal employer is required to furnish under the provisions of the Scheme to the Commissioner.
Hope, the above information suffices the need.
In Both the cases even PF and ESI, Principle Employer Responsibility to Pay the contributions.
From India, Mumbai
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Dear all,
The principal employer is bound to ensure satisfactory compliance regarding workers employed directly or indirectly and is also liable to deposit the interests and damages imposed on late deposits of contributions in case the compliance is being made in the employer's code of the principal employer.
In other cases where the contractor is independently covered under the provisions of EPF or ESIC, the Department has to recover these amounts directly from the contractors where the employer's code of such contractors is active.
From India, Delhi
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The principal employer is bound to ensure satisfactory compliance regarding workers employed directly or indirectly and is also liable to deposit the interests and damages imposed on late deposits of contributions in case the compliance is being made in the employer's code of the principal employer.
In other cases where the contractor is independently covered under the provisions of EPF or ESIC, the Department has to recover these amounts directly from the contractors where the employer's code of such contractors is active.
From India, Delhi
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Dear Faruk,
Let me please begin my response with a corrective note for the unintentional wrong spelling of any term can lead us to miss the exact meaning intended to be conveyed through it. It is not "principle employer" but "Principal Employer" the C.L.R.A Act mentions about and means that the one who is the most important employer among the two or more including a sub-contractor in the system of contract labour. Simply put, being the principal or main person in relation to the matter of employment of the contract labour engaged by him through the contractors, he is the "Principal Employer"; being the principal or master or contractee to the contract with the contractor or agent in the matter of employment of contract labour in connection with the work of his establishment, the Principal Employer assumes vicarious liability or responsibility in certain functions discharged by the contractor. Now, go through your questions and the answers given by Tushar and Ravi.
From India, Salem
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Let me please begin my response with a corrective note for the unintentional wrong spelling of any term can lead us to miss the exact meaning intended to be conveyed through it. It is not "principle employer" but "Principal Employer" the C.L.R.A Act mentions about and means that the one who is the most important employer among the two or more including a sub-contractor in the system of contract labour. Simply put, being the principal or main person in relation to the matter of employment of the contract labour engaged by him through the contractors, he is the "Principal Employer"; being the principal or master or contractee to the contract with the contractor or agent in the matter of employment of contract labour in connection with the work of his establishment, the Principal Employer assumes vicarious liability or responsibility in certain functions discharged by the contractor. Now, go through your questions and the answers given by Tushar and Ravi.
From India, Salem
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Dear Mr. Frank,
EPF & ESI contributions are to be remitted on or before the 15th and 21st of every month, respectively. Any delay in the remittance of contributions will attract damages, penalties, and may result in the disallowance of IT benefits.
You are requested to calculate the damages and interest incurred, which will be deducted from the Contractor's wage bill in case of default.
Thank you.
From India, Bangalore
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EPF & ESI contributions are to be remitted on or before the 15th and 21st of every month, respectively. Any delay in the remittance of contributions will attract damages, penalties, and may result in the disallowance of IT benefits.
You are requested to calculate the damages and interest incurred, which will be deducted from the Contractor's wage bill in case of default.
Thank you.
From India, Bangalore
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When the contractor has an independent PF and ESIC code number, he will be responsible for remitting contributions on time; otherwise, he will face penal provisions (penalty, interest, or even prosecution). An important point to consider is whether the employer has paid the wage bill of the contractor on time. For one or two months, the contractor may remit contributions from their own funds. If the contractor does not have the capacity to remit contributions for payments not received from the principal employer and informs the PE about the same, then the matter may cause harm to the PE.
From India, Mumbai
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From India, Mumbai
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Dear Sir(s),
In my opinion, if the contractor or "immediate employer" has a separate code number under the ESI Act, 1948, even then the principal employer is liable for defaults in respect of non-payment of contributions in respect of employees employed in or in connection with the work of the principal employer.
From India, Noida
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In my opinion, if the contractor or "immediate employer" has a separate code number under the ESI Act, 1948, even then the principal employer is liable for defaults in respect of non-payment of contributions in respect of employees employed in or in connection with the work of the principal employer.
From India, Noida
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