We are a company with around six labor contractors, totaling 90 employees. It has been noticed that the payments to PF, ESIC, etc., are not being made on time by the contractors. Our management has decided to directly pay these amounts to PF, etc., from our bank account. Is this legally permissible?
From India, New Delhi
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2From India, New Delhi
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It is not possible. You need to insist the contractor on obtaining individual numbers from the EPF and ESI Office. Any violation of this statute makes you, as the principal employer, liable for their non-compliance.
From India, New Delhi
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From India, New Delhi
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Dear Mr. Balaji,
Please contact us if you require any professional support to comply with statutory compliance in the engagement of contractors/contract labor, including coverage, recovery, and remittance of PF and ESI contributions in our PF and ESI code numbers. We have been providing our services for many of the Group Companies in South India for the last 25 years.
Regards,
N. Nataraajhan
Sakthi Management Services
(HP: +91 94835 17402; email: natraj@sakthimanagement.com)
From India, Bangalore
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Please contact us if you require any professional support to comply with statutory compliance in the engagement of contractors/contract labor, including coverage, recovery, and remittance of PF and ESI contributions in our PF and ESI code numbers. We have been providing our services for many of the Group Companies in South India for the last 25 years.
Regards,
N. Nataraajhan
Sakthi Management Services
(HP: +91 94835 17402; email: natraj@sakthimanagement.com)
From India, Bangalore
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Payment to contractor - Its implications are not strategic from practical angles. Normally, the contractor should be allowed to reimbursement what the remittance he paid on evidence and scrutiny of papers he has deposited/paid. That payment can be given as reimbursement to the contractors. If the contractor has his PF and ESI numbers, he will be liable as the first part to respective inspections and its regulatory compliance. Please note that the Contract Act is subject to regulations and abolitions both. Any artificial arrangement will be untenable. What if workmen will claim wages equal to regular employees engaged by your company. Also, see what others nearby are doing and consult some advisors as well.
Regards, RDS Yadav Management Advisor and Trainer Director - Future Institute of Management and Technology
From India, Delhi
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Regards, RDS Yadav Management Advisor and Trainer Director - Future Institute of Management and Technology
From India, Delhi
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Dear Mr. Balaji,
Please note that the contractors do not comply with statutory regulations under the Contract Labour (R & A) Act. The ultimate responsibility shall lie with the Principal Employer. Therefore, the Principal Employer shall remit the contributions for PF, ESI, etc., on behalf of the contract labor and deduct the amount from the bills of the contractors.
Thanks & Regards, V R RAO PULIPAKA
From India, Chennai
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Please note that the contractors do not comply with statutory regulations under the Contract Labour (R & A) Act. The ultimate responsibility shall lie with the Principal Employer. Therefore, the Principal Employer shall remit the contributions for PF, ESI, etc., on behalf of the contract labor and deduct the amount from the bills of the contractors.
Thanks & Regards, V R RAO PULIPAKA
From India, Chennai
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Dear Balaji,
There is no harm in remitting PF and ESI from the account of the company's codes. Normally, contractors are avoiding compliance due to the low income from contract work. They generally try to manage this with the company's Personnel Dept. or the Government Labour Dept. However, responsibility should not be disregarded.
Please consider appointing a literate daily wage laborer from the contractor and allow them to maintain records of all the contractors. Enable this individual to learn from your Labor Officer on how to properly maintain these records. I have implemented this once during my career 15 years ago, where all the contractors were willing to pay a monthly salary to the record keeper.
Regards and best of luck.
From India, Poona
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There is no harm in remitting PF and ESI from the account of the company's codes. Normally, contractors are avoiding compliance due to the low income from contract work. They generally try to manage this with the company's Personnel Dept. or the Government Labour Dept. However, responsibility should not be disregarded.
Please consider appointing a literate daily wage laborer from the contractor and allow them to maintain records of all the contractors. Enable this individual to learn from your Labor Officer on how to properly maintain these records. I have implemented this once during my career 15 years ago, where all the contractors were willing to pay a monthly salary to the record keeper.
Regards and best of luck.
From India, Poona
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STATUTORY COMPLIANCES CHECKLIST ON VARIOUS LABOUR LAWS.xls