Dear Team,
What are the issues as a principal employer we would face for drafting below clause in contract documents to be issued to contractor.
PF liability shall be defined as below for the job works (Labour wages)
1 Contractors shall be bifurcated in following categories:
a. Contractors with PF registration or have applied for PF registration
b. Contractor without PF registration and are not interested to register (includes contractor who are having less than 9 labours at site).
2 For contractor falling under category 1 a. needs to submit PF challans & ECS monthly as per government norms.
3 For contractor falling under category 1b, Company/principal Company shall contract the rates based on required PF deductions from RA bill as mentioned in point 4 below, as well as include the same in contract condition considering it as an job work.
4 For non PF registered contractor, it is deemed that from total amount of work order issued, 40% of the amount is labor part and on such labor part the applicable PF deduction is of 25.61%.
5 The deduction as mentioned in 4th point shall be deducted from each RA bill (gross bill – before ST) of contractor (incl. retention) and the summary page of RA bill certificate.
From India
What are the issues as a principal employer we would face for drafting below clause in contract documents to be issued to contractor.
PF liability shall be defined as below for the job works (Labour wages)
1 Contractors shall be bifurcated in following categories:
a. Contractors with PF registration or have applied for PF registration
b. Contractor without PF registration and are not interested to register (includes contractor who are having less than 9 labours at site).
2 For contractor falling under category 1 a. needs to submit PF challans & ECS monthly as per government norms.
3 For contractor falling under category 1b, Company/principal Company shall contract the rates based on required PF deductions from RA bill as mentioned in point 4 below, as well as include the same in contract condition considering it as an job work.
4 For non PF registered contractor, it is deemed that from total amount of work order issued, 40% of the amount is labor part and on such labor part the applicable PF deduction is of 25.61%.
5 The deduction as mentioned in 4th point shall be deducted from each RA bill (gross bill – before ST) of contractor (incl. retention) and the summary page of RA bill certificate.
From India
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Kami Export - Negative Covenant in Contract of Employment.pdf (1).pdf