Is it possible to pay the company’s driver full compensation in hand without bringing him on payroll?
From India, Kolkata
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1From India, Kolkata
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Though it is possible as long as either the poor employee does not complain or the labor enforcement officer fails to notice it, certainly, it is an unfair labor practice. The employee loses his identity with the organization and social security benefits like EPF, gratuity, etc.
From India, Salem
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From India, Salem
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Actually, it's the employee who wanted their salary in cash instead of depositing it into a bank account with all the benefits as you mentioned. However, you are right that this is a wrong practice and we should not encourage it.
From India, Kolkata
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From India, Kolkata
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Dear Sandipg1977,
You cannot say that the employee agreed to a lower salary, and therefore you gave him less pay.
You cannot say that the employee agreed to no deductions of PF, ESI, etc., from his salary, and therefore you are not deducting PF, ESI, etc., from his salary.
You cannot say that the employee agreed to receive the salary in a non-currency form, and therefore you gave it in some other form (barter system), and so on. This is all called contracting out in law.
Contracting out means no one is allowed to either relinquish or reduce their legal rights/entitlements. Anyone relinquishing or reducing their legal rights/entitlements for whatever reason, it would be null and void.
From India, Mumbai
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You cannot say that the employee agreed to a lower salary, and therefore you gave him less pay.
You cannot say that the employee agreed to no deductions of PF, ESI, etc., from his salary, and therefore you are not deducting PF, ESI, etc., from his salary.
You cannot say that the employee agreed to receive the salary in a non-currency form, and therefore you gave it in some other form (barter system), and so on. This is all called contracting out in law.
Contracting out means no one is allowed to either relinquish or reduce their legal rights/entitlements. Anyone relinquishing or reducing their legal rights/entitlements for whatever reason, it would be null and void.
From India, Mumbai
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Dear all, If the driver is paid above 15,000 per month, do the deductions like PF, gratuity and bonus still apply?
From India, Aurangabad
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From India, Aurangabad
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Dear HBJ,
Whether you employ a driver, a helper, or any person in any category, or even if you employ someone for just one day, you must cover them under the PF and ESI if these enactments are applicable to your company or establishment and if the person employed is eligible for enrollment under these enactments.
When you employ someone, you are liable to obtain PF Form 11 from them. In this Form 11, the employee declares whether they were a member of EPF / EPS before joining you and provides their UAN / PF number.
If the employee declares in Form 11 that they are a member of EPF / EPS, you must enroll them under EPF / EPS. If they are not a member of EPF / EPS and their salary (PF Salary) at joining you exceeds Rs. 15,000, you have the option to enroll them under EPF / EPS if they agree to it. It is not mandatory to enroll them under EPF / EPS in this case.
ESI is applicable if the salary is less than Rs. 21,000.
Gratuity is applicable if the employee (whether a driver or otherwise) completes 5 years of service, provided the Payment of Gratuity Act is applicable to your establishment.
Bonus is applicable if the employee (whether a driver or otherwise) works for 30 days or more in a financial year and if their basic plus DA is less than Rs. 21,000 per month, provided the Payment of Bonus Act is applicable to your establishment.
From India, Mumbai
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Whether you employ a driver, a helper, or any person in any category, or even if you employ someone for just one day, you must cover them under the PF and ESI if these enactments are applicable to your company or establishment and if the person employed is eligible for enrollment under these enactments.
When you employ someone, you are liable to obtain PF Form 11 from them. In this Form 11, the employee declares whether they were a member of EPF / EPS before joining you and provides their UAN / PF number.
If the employee declares in Form 11 that they are a member of EPF / EPS, you must enroll them under EPF / EPS. If they are not a member of EPF / EPS and their salary (PF Salary) at joining you exceeds Rs. 15,000, you have the option to enroll them under EPF / EPS if they agree to it. It is not mandatory to enroll them under EPF / EPS in this case.
ESI is applicable if the salary is less than Rs. 21,000.
Gratuity is applicable if the employee (whether a driver or otherwise) completes 5 years of service, provided the Payment of Gratuity Act is applicable to your establishment.
Bonus is applicable if the employee (whether a driver or otherwise) works for 30 days or more in a financial year and if their basic plus DA is less than Rs. 21,000 per month, provided the Payment of Bonus Act is applicable to your establishment.
From India, Mumbai
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