Dear all
I have recently come to know from my senior that now it is compulsory for the contractor to pay bonus and leave allowance to their employee. Is it true. If yes, then should the contractor charge this amount to principle employer every month. Is there any responsibility of principle employer. As far as i know, principe employer is responsible for the wages payment only which does not include bonus and leaves.
Kindly clarify.
best regards,
priyanka
From India, Mumbai
1I have recently come to know from my senior that now it is compulsory for the contractor to pay bonus and leave allowance to their employee. Is it true. If yes, then should the contractor charge this amount to principle employer every month. Is there any responsibility of principle employer. As far as i know, principe employer is responsible for the wages payment only which does not include bonus and leaves.
Kindly clarify.
best regards,
priyanka
From India, Mumbai
The Principal employer is not responsible for payment of bonus, leave etc to the cemployees engaged through a contractor but he has to ensure that all such statutory payments in respect of such employees are paid by the respective contractors. With regard to ESI/ EPF, it becomes the primary duty of the principal employer to pay the contributions in the first instance but at the same time he can claim it from the contractor or adjust the amount so paid from any money payable to the contractor. This means that contracted employees are employees of the contractor only and since they are working with the principal employer he makes the statutory payments on behalf of the contractor.
Regarding Bonus, it neednot match with the bonus paid by the principal employer to his employees. Generally bonus is fixed according to the profitability of each unit. Therefore, it is meaningless to pay bonus to the contracted employees at the same rate as applicable to the direct employees and ask the contractor to bear it whereas the contractor's profitability may not be so high. Therefore, it is always desirable to have an understanding to the effect how the bonus and leave wages are paid. However, the principal employer has to ensure that statutory payments are paid to the contractor's employees working under him.
Regards,
Madhu.T.K
From India, Kannur
Regarding Bonus, it neednot match with the bonus paid by the principal employer to his employees. Generally bonus is fixed according to the profitability of each unit. Therefore, it is meaningless to pay bonus to the contracted employees at the same rate as applicable to the direct employees and ask the contractor to bear it whereas the contractor's profitability may not be so high. Therefore, it is always desirable to have an understanding to the effect how the bonus and leave wages are paid. However, the principal employer has to ensure that statutory payments are paid to the contractor's employees working under him.
Regards,
Madhu.T.K
From India, Kannur
Thanks a lot sir.
As we are going to sign agreemnet with a security agency very soon. We will take an undertaking from them in writing before signing the agreement regarding payment of bonus and leaves to their employees.
Best regards,
Priyanka
From India, Mumbai
As we are going to sign agreemnet with a security agency very soon. We will take an undertaking from them in writing before signing the agreement regarding payment of bonus and leaves to their employees.
Best regards,
Priyanka
From India, Mumbai
As per the responsibility of the PE is concern the PE’s responsibility is limited to payment of wages and ESI & EPF part only Regards, Mothi
Dear Sir,
Responsibility of PE is limited to ESI & EPF only but PE should ensure regular payment of bonus and leave to the employee by the contractor. What are the ways by which PE can sure such payments?
As far as I know, in practical world, if PE is not paying bonus and leave to the contractual employee then contractor neither pays this amount to his employees nor he takes any responsibility for this payment. Hence the responsibility shifts to PE.
Kindly clarify.
best regards,
Priyanka
From India, Mumbai
Responsibility of PE is limited to ESI & EPF only but PE should ensure regular payment of bonus and leave to the employee by the contractor. What are the ways by which PE can sure such payments?
As far as I know, in practical world, if PE is not paying bonus and leave to the contractual employee then contractor neither pays this amount to his employees nor he takes any responsibility for this payment. Hence the responsibility shifts to PE.
Kindly clarify.
best regards,
Priyanka
From India, Mumbai
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