if a contractor ran by clearing his account and payment without submitting his esi and pf challans.then as a principal employer , what a company should do?
From India, Ponda
Dear With what understanding you have cleared his account ? You must be knowing better then us. If the contractor fails to deposit the ESI & PF then you must be knowing that in the capacity of principal employer you are to deposit the amount & recovered it from the bills of the contractor or security deposited with you. If none of the position is not there then file a civil case for its recovery. opinion submitted as requested. Regards, R.N.Khola (Labour Law & Legal Consultants)
From India, Delhi
this case was occurred before my joining in company and now i m not getting it to any conclusion . how to solve it.?
From India, Ponda
as a pricipal employer you are liable to pay, if the contractor has run away see that he is found out or else the company has to pay for the same
From India, Bangalore
Hey S_dkim, A common issue with all contracters...they are a ******. Neverthless, as per labor act, principal employer is liable for all cost and you should contact a good labor consulatant and get the books in place. And yes, if you have the contractor number you can also lodge a complaint with the labor office. I know no action will be taken by them...but suggest you do that.... Regards, Ukmitra
From Saudi Arabia, Riyadh
dear mr khola has given right suggestion ,you are bound to pay to authorites. if you can recover well and good but you are liable to pay. regards js malik
From India, Delhi
first of all, not to sanction / pass the bill for him until he submits the last month’s esi / pf challan to you. always ensure for payment to the contract workers before you. rgds youva

Dear Stalwarts, Good to note this point. My question is when PF / ESI challan along with the current bill, how to ensure the Contractor is remitted such amount for his persons employed particularly in my Factory? Look foward to your clarification please. Best Regards Sundararaman - HEAD HR & Admn in a Pvt Ltd. (Engg Mfg Unit in Tamil Nadu)
From India, Madras
as a principal employer u have to pay to the authorities.later when settling dues of the contractor u can adjust the same through sd and pending running bills.

Dear. As your company being the priccipal Employer, the agreeements drawn between your company and the contractor should be very clear on these statutory issues. You are also advised to collect the copies of Registration Certificates, ie relating to PF, ESI, PT Etc., and keep them for records, which will be in confirmity that you have engaged a registered contractor in all matters relating to statutory issues. By and large, the ultimate onus lies on the principal employer to discharge all such liabilities, if notices are issued to contractors and they do not pay. The best practices, some of the companies do is they deduct such amounts and take out the drafts favouring statues and have them deposited on behalf of the contractors. I hope this clarifies ur doubts and any further more queries, you are most welcome to post.
From India, Hyderabad

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