Dear HR Professionals and seniors,
Please urgently clarify the following things. We took civil contract work (boundary wall construction and chain-link fencing) from one company. Additionally, we have a license under the Contract Labour (Regulation and Abolition) Act, 1970. Our current employee strength is 15. In the future, it may increase or decrease. The project work duration is only 6 months.
Should we deduct PF and ESI for that contract labor under the Contract Labour (Regulation and Abolition) Act, 1970, and the Contract Labour (Regulation and Abolition) Central Rules, 1971?
Kindly clarify.
Thanks with Regards, Thirumurugan
From India, Hyderabad
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36Please urgently clarify the following things. We took civil contract work (boundary wall construction and chain-link fencing) from one company. Additionally, we have a license under the Contract Labour (Regulation and Abolition) Act, 1970. Our current employee strength is 15. In the future, it may increase or decrease. The project work duration is only 6 months.
Should we deduct PF and ESI for that contract labor under the Contract Labour (Regulation and Abolition) Act, 1970, and the Contract Labour (Regulation and Abolition) Central Rules, 1971?
Kindly clarify.
Thanks with Regards, Thirumurugan
From India, Hyderabad
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Dear HR Professionals and seniors,
Please urgently clarify the following things.
We took civil contract work (boundary wall construction and chain link fencing) from one company. Additionally, we have a license under the Contract Labour (Regulation and Abolition) Act, 1970. Our current employee strength is 15 individuals. It is possible that this number may increase or decrease in the future. The project work duration is only 6 months.
Should we deduct PF and ESI for that contract labor under the Contract Labour (Regulation and Abolition) Act, 1970, and the Contract Labour (Regulation and Abolition) Central Rules, 1971?
Kindly clarify.
Thanks with regards,
Thirumurugan
From India, Hyderabad
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Please urgently clarify the following things.
We took civil contract work (boundary wall construction and chain link fencing) from one company. Additionally, we have a license under the Contract Labour (Regulation and Abolition) Act, 1970. Our current employee strength is 15 individuals. It is possible that this number may increase or decrease in the future. The project work duration is only 6 months.
Should we deduct PF and ESI for that contract labor under the Contract Labour (Regulation and Abolition) Act, 1970, and the Contract Labour (Regulation and Abolition) Central Rules, 1971?
Kindly clarify.
Thanks with regards,
Thirumurugan
From India, Hyderabad
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the day when the total strength exceeds (including contractor worker) for principal employer, the rules get enforced. if you dont cover, the principal employer is bound to deduct and pay.
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Dear sir,
Our civil project work is only 6 months. Once the project is completed, all employees' service will come to an end automatically. In this case, are the PF and ESI rules applicable to us (contractor) strictly? We have received a contract license for 50 workmen.
Thanks with Regards,
Thirumurugan
From India, Hyderabad
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Our civil project work is only 6 months. Once the project is completed, all employees' service will come to an end automatically. In this case, are the PF and ESI rules applicable to us (contractor) strictly? We have received a contract license for 50 workmen.
Thanks with Regards,
Thirumurugan
From India, Hyderabad
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What about BOCW Act? You must register under the building And other construction workers act too.
From India, Mumbai
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From India, Mumbai
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Contract Labour (Regulation & Abolition) Central Rules, 1971
An Act to regulate the employment of contract labour in certain establishments and to provide for its abolition in certain circumstances and for matters connected therewith.
Be enacted by Parliament in the Twenty-first Year of the Republic of India as follows:
CHAPTER I
PRELIMINARY
1. Short title, extent, commencement, and application. - (1) This Act may be called the Contract Labour (Regulation and Abolition) Act, 1970.
(2) It extends to the whole of India.
(3) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint, and different dates may be appointed for different provisions of this Act.
(4) It applies -
(a) to every establishment in which twenty or more workmen are employed or were employed on any day of the preceding twelve months as contract labour;
(b) to every contractor who employs or who employed twenty or more workmen on any day of the preceding twelve months.
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An Act to regulate the employment of contract labour in certain establishments and to provide for its abolition in certain circumstances and for matters connected therewith.
Be enacted by Parliament in the Twenty-first Year of the Republic of India as follows:
CHAPTER I
PRELIMINARY
1. Short title, extent, commencement, and application. - (1) This Act may be called the Contract Labour (Regulation and Abolition) Act, 1970.
(2) It extends to the whole of India.
(3) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint, and different dates may be appointed for different provisions of this Act.
(4) It applies -
(a) to every establishment in which twenty or more workmen are employed or were employed on any day of the preceding twelve months as contract labour;
(b) to every contractor who employs or who employed twenty or more workmen on any day of the preceding twelve months.
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Contract labor license is granted for 20 or more manpower. Therefore, all rules of EPF/ESIC (professional tax, if applicable) are applicable to the contractor. It does not matter if they cease to work on a certain day after the contract finishes.
If the contractor chooses to surrender the EPF/ESIC/Contract labor license after completing the work, they can do so at their own will with supporting documents. However, under no circumstances can they deny the labor welfare acts/rules that are applicable.
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If the contractor chooses to surrender the EPF/ESIC/Contract labor license after completing the work, they can do so at their own will with supporting documents. However, under no circumstances can they deny the labor welfare acts/rules that are applicable.
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For the principal employer, construction of a compound wall may be outside the purview of their regular business, and no ESI/PF need to be paid concerning the payments made for that. However, as an employer, you are expected to have ESI registration because your employment strength on any day is more than 10. Therefore, when you engage people and pay them wages, you should deduct ESI.
I would also like to clarify that the construction of a compound wall may be treated as work incidental to the factory work, depending on the situation. There have been different views regarding its treatment. To err on the side of caution, principal employers usually pay the contract money after deducting the ESI/PF. For the contractor as well, it is advisable to do the same because the work involves risks, and ESI serves as a beneficial insurance and medical attention scheme.
Madhu.T.K
From India, Kannur
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I would also like to clarify that the construction of a compound wall may be treated as work incidental to the factory work, depending on the situation. There have been different views regarding its treatment. To err on the side of caution, principal employers usually pay the contract money after deducting the ESI/PF. For the contractor as well, it is advisable to do the same because the work involves risks, and ESI serves as a beneficial insurance and medical attention scheme.
Madhu.T.K
From India, Kannur
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Since you were engaged as a contract worker for less than the prescribed limit (<19), the provision of obtaining a Contract Labour License wouldn't be decisive. However, in respect of ESIC, it should be ensured whether the areas have been notified or not. If applicable, the contractor/principal employer should make contributions to the same. Nevertheless, EPF is applicable to the contractor.
Ascertaining the applicability of BoCW is at your own risk. The act is not applicable if the construction is within the ambit of an existing factory expansion.
Veda
[VEDA LEGAL RESOURCES (P) Ltd | Legal & Compliance Services](http://www.vedalegal.com)
From India, Madras
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Ascertaining the applicability of BoCW is at your own risk. The act is not applicable if the construction is within the ambit of an existing factory expansion.
Veda
[VEDA LEGAL RESOURCES (P) Ltd | Legal & Compliance Services](http://www.vedalegal.com)
From India, Madras
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Dear Thirumurugan,
Numerical strength of the workmen/employees actually employed is one of the determinants for the applicability of all the three enactments viz., the ESI Act, the EPF Act, and the CLRA Act to any establishment. However, by virtue of the difference in the threshold strength plus the duration of employment, the application of the Acts can be concurrent or consecutive. For all practical purposes, a contractor's establishment is also an establishment under the ESI and EPF Acts. Therefore, I concur with Mr. Madhu. Even in the case of you being an unlicensed contractor in respect of a particular Principal Employer because of both the number and duration parameters, what is the guarantee that you will not rotate some of your contract labor among other PEs?
From India, Salem
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Numerical strength of the workmen/employees actually employed is one of the determinants for the applicability of all the three enactments viz., the ESI Act, the EPF Act, and the CLRA Act to any establishment. However, by virtue of the difference in the threshold strength plus the duration of employment, the application of the Acts can be concurrent or consecutive. For all practical purposes, a contractor's establishment is also an establishment under the ESI and EPF Acts. Therefore, I concur with Mr. Madhu. Even in the case of you being an unlicensed contractor in respect of a particular Principal Employer because of both the number and duration parameters, what is the guarantee that you will not rotate some of your contract labor among other PEs?
From India, Salem
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