My company is hiring security guards from a contractor, we are not aware about their deduction of ESIC & PF. We are paying per guard Rs.3500/- plus service tax, as per their income contractor have to give benefit of ESIC & PF.
If they are deducting ESIC & PF then are we liable to pay ESIC & PF to goverment ?
ESI is contributed from both the sides Employee as well as Employer.
It is been calculated on the basis of Gross salary per month and the maximum ceiling is 10000 Rs./Month.
The contribution from both the sides is as below-
Employee Side- 1.75% of gross/month
So if gross of an employee is 8000/month then
ESI contribution would be 8000*1.75% = 140 Rupees
Employer side- 4.75% of gross/month
ESI contribution would be 8000* 4.75% = 380 Rupees.
Whereas, PF is also been paid from both the sides.. Both the employer as well as employee is required to pay the 12% of basic salary..
Out of this 12% of employer's contribution 8.33% goes to Pension fund whereas rest 3.67% goes to the PF Fund itself..
Thanks for reply
But my question is security guards which I am hiring if their employer is not deducting ESIC & PF then in any case am I liable for ESIC & PF ?
Because I think ( actually I am not sure about it) even any repairing charges or any labour charges company have to deduct ESIC.
Your company is not directly required to pay these contribution with the government bodies..
You are required to check whether the outsourced company is providing these benefits to their employees or not.. as these are your outsourced employees..
So, you are required to ask to the Outsourcing company to provide the returns and all details related with the same....
Your reply on Rachana's query is right, but now the salary for ESI is raised upto Rs. 10,000.00. If the employees who r having the gross salary of Rs. 10,000.00 , then he is eligible for the deduction and benefit of ESI.
You have to ensure from contractors side that they are deducting the ESI and PF from contract employees salary and paying the same to government. For that you can ask monthly challans from the contractors. If you are not ensuring the same, during the inspection it's sole responsibility of Employers.
As a principle employer you are liable to deposit ESI & PF. If ESI & PF authorities find anything wrong in that position Principle Employer is liable for these payments and they will tell the principle employer to deposit the amount but principle employer can deduct the same amount from the contractor bill.
All of us understand that compliance of ESIC & PF is must and therefore all the contract workers and direct employees must be covered under the act (according to the law). But my question is that in our company we are appointing various service contractors for providing service on site, so in few cases the contractor visits only 4-5 times in a month(2 to 3 Peoples), are we required to deduct PF & ESIC contributions?
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