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First see weather the contractor is a registed contractor, Ask you contractor to give the PF & ESI challan monthly with a letter stating that this challan inclued the PF amt of the workers & tak the list every one. if contrator fails to pay the Pf & ESI the liability vests to your Company. the challans of PF & ESI shluld be their also, if the Inspectors of the concern department visit for inspection they will surely ask for the same to u first.

From India, Mumbai
Dear Govind,
The simple answer to your question is only principal employer, means you are totally responsible for non-payment of the dues. As a principal employer, it is your duty to confirm that the contractor follows all statutory compliance. So, First you get copy of pf & esi registration from the contractor. Make all labour payment in front of your company representative. If possible, deposit the PF & Esi contribution directly in the concerned authority. Any way, as principal employer, you are entirely responsible for everything.
Thanks ,
shiv kumar

From India, Delhi
Hi Govind & friends,

End of the day Principal Employer( PE) is liable for all non compliance of contractor. So, periodically PE should review his challans submitted with appropriate authority.

Befor enggaging contractors following facts should be considered always.

----Bfor awarding contract to contractor----------

Principal Employer's nature of business should not be same as contractor's.

Contractor should have PF & ESIC codes, verify the same with pf & esi deptt.

Principal employer must obtain a registration under CL(R&A) Act 1970.

Issue Form V to Contractor.

Submitt Form VI-B with appropriate Authority for commencement or completion of work.

--------Post awarding contract------------------

Ensure, contractor should obtain License under CL(R&A) Act 1970

Periodically verify the challans of PF, ESIC, LWF if applicable, Wage register, OT register, fine & advance register,

Form XII should be maintained by PE

Ensure that Contractor should submitt Half yearly return in Form XXIV

PE should send their Annual return in Form XXV

Do not supervise the labour of Contractor directly to avoid Employer & Employee relationship.

Do not issue similar I-Card, Appreciation letter or any communicatin on letter head of Co. to contractual workman.

Sign off Wage payment register that salary was disbursed bfor 07th of month in presence of management representative.

Ensure your contractor should comply with all labour laws applicable to him else PE will be responsible for same.

Ensure your contractor should have issued I-card, appointment letter, payslip, PF & ESIC a/c No. to all their employees enggaged by him.


From India, New Delhi
The principal employer is bound under the acts on PF,ESI and CLRA to ensure that the contractor employed has followed the relevant rules under the acts in respect of the persons employed by him for the principal employer.Merely by giving the amount to the contractor will not make the principal employer free from his duties.
From India, Kolkata
HI,govind you are the principal employer have the legal liablity and right to get secured the personnels working with in your premises. your company have all the rights to verify the contractor crediblity with the ESI&PF office and with labour commissioner periodically or whenever you want at hte interest of the RISK on your co. LEGAL LIABLITY.
IF abny thing found guilty you can itake it to the knowledge of the respctive authorities, failing to which you are the joint responsiblity if any thing misfortune.
nagarajan. agent advisor, cholamandalam general ins. and SBI LIFE INS.

From India, Madras
Make a schedule of the contarctor to submit their record and ask every body about original record like ESI PF PT LWF challans and put xerox after inspection with you. Ask every body to pay saperate challan your unit. Some contractor not paying for the particular unit and showing that we are paying all sites challan one time. Do not put faith on him ask him about saperate challan only. Principle Employer is responsible for every payment of statutory. so keep watch on every body.
within inspection you can understand all the rules & regulation. Some contractor are paying less to his employee and showing as per rule in wage register. conveyance & travelling allowance is most adjusted amount you can find in this section.
Thanking you
if you have query please contact me.

From India, Pune
Dear Shiv,
Thanks for comprehensove reply. Can you please explain two terms in your reply.
Do not supervise the labour of Contractor directly to avoid Employer & Employee relationship.
Do not issue similar I-Card.
We are planning to take 25 sales staff across India through contractor.
What all documntes we should take from contractor and which records are to be maintained by us.
We would be tracking their attendance only, rest would be managed by contrcator

From India, Delhi
If the contractor is employeeing more than19 workmen, it is mandatory for him to have a licence from Labour Deptt. Otherwise in case of industrial dispute, all employees will be treated as principal employers emploee. Please ensure he has licence issued by Labour Deptt, as per Contract labour Act & regulations.
For PF & ESI, please ask the contractor to submit copy of monthly challan as proof of deposite, to your organisation before clearing his bill. Also ask the contractor to show his registration certificate with PF & ESI authorities. Alternatively you can directly deposit the PF & ESI dues and deduct the amount from his bill
S K Sinha

From India, New Delhi
My opinion in this regard is,
Firstly as a employer its your responsibility that you make an agreement with the manpower contractor after verfying all the legal formalities like, whether the contractor ws registered under the labour law, pf, esi and other mandatory policies of the state/central govt. once the employer found that the contractor is registered , then, need to make an agreement that the employee is not liable for any statutory laws like pf, esi, gratuty, bonus etc. now, in your case, as said by some of our friends that in case if your agreement says your not liable for any statutory laws, then your contractor is liable, other wise you are liable. please correct me incase if I have said something wrong.

From India, Hyderabad
MR.GOVIND It is your responsiblity to check and clarify. At the end of the the day you are answerable to govt. You have all the rights to check and clarify with govt. authorities and in turn they will be in alert on the contactor to correct if anything found guilty.
S. NAGARAJAN ,Agent advisor, 9884396009

From India, Madras

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