Madhu.T.K
Industrial Relations And Labour Laws
Pbskumar2006
General Manager-hr
Rreddygk
Statutory Compliance
Kishorpp
Statutary Consultant
A K GAUTAM
Head-hr & Admin
Sivakumar1611
Recruitment, E.s.i. & P.f
S.VIJAYASIMHARAO
Human Resources
+1 Other

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Dear Seniors,



We have some contractors who come on need basis and perform the work and go. We pay accordingly to them. Some of the contractors who do their job on their own and some of them they deploy manpower for the same(For Ex: Cycle repair, Glass cleaning, carpenter work, Electrical works, courier,AC maintenance…etc) . Please help me in understanding the applicability and liability regarding the ESIC to these contratcors.My queries are as follows..



1.What is the liability of principal employer in the ESIC and PF?

2.Incase if contractor is not covered under ESIC as he may have less employees whether we should cover them under our ESIC code?

3.If we cover how do we obtain the ESIC card and submit Half Yearly returns?

4.We are thinking to deduct 6.5% on 30% from the total bill amount by considering the labor charges of total contract amount and pay to the ESIC.If we do that how do we pay the contributions on their name?



Please answer my queries as we need to work on this urgently.



Thanking you in advance.



Regards,

Ram.


Dear sir, as per your query you can take their names in esic on the basis of principle employer you deduct from their salary & contribute in esic . for details please contact
Hi Ram,

as per your posting what i understand is if you employ any labour on contarct basis then first you have to consider one point that they are on daily basis or on monthly basis, if you employed the labour on daily basis then your payment is made daily or weekly if you are doing on week ly basis then how llong the work is going to be checked with the concerned dept and if it is long run process and the same employee is continuing then you need to deduct only 1.75% on there daily wage and at the time of applying for a ESIC card for registering of an employee then you need to mentoin on the application form your ESIC registered number only and then process the form if the contractor doesn't covered the labour, if the labour you employed on monthly basis then you need to deduct at that time also 1.75% only on there wages and at the time of filing return in to ESIC you need show them as a seperately.

you cann't deduct 6.5% on the wages what you are paying.

Regards,

Siva Kumar tata

Thanks Siva Kumar,
But my question is how do we submit the ESIC forms as these employees are not regular employees.Also these contractors come and work only on need basis.We can't submit their ESIC forms as none of our regular employees are covered under ESIC even though we have 1 lakh employees.All are above ESIC bracket hence we are submitting nil returns.
My question is how do we pay ESIC for these contractors,as these are like for Ex:Cycle repair, Glass cleaning, carpenter work, Electrical works, courier,AC maintenance…etc.Amount we don't pay as wages we pay based on the work involved.
Regards,
Ram.

Thanks Siva Kumar,
But my question is how do we submit the ESIC forms as these employees are not regular employees.Also these contractors come and work only on need basis.We can't submit their ESIC forms as none of our regular employees are covered under ESIC even though we have 1 lakh employees.All are above ESIC bracket hence we are submitting nil returns.
My question is how do we pay ESIC for these contractors,as these are like for Ex:Cycle repair, Glass cleaning, carpenter work, Electrical works, courier,AC maintenance…etc.Amount we don't pay as wages we pay based on the work involved.
Regards,
Ram.

Hi Ram, so they aren’t the regular employees then it is not necessary to deduct any ESIC amount for them. Regards, Siva Kumar
It is okay if you are not deducting ESI on the maintenance payment if it is paid under an AMC but in other cases the payments whether it is regular or not it will be construed as labour payments which will attract ESI.
These are casual payments and on that you are expected to pay ESI contributions in full. However, if the bill charged by the person engaging the work includes any element of materials, like nuts and bolts, then you need to get it bifurcated and pay ESI on the labour charges only. The onus to prove this is with the employer only.
If none of your employee is under ESI, then also you have to pay it in respect of those who are engaged on a casual basis. You can register the casuals under your ESI code itself and the payments deducted and contributed should be reflected in the returns.
Regards,
Madhu.T.K

Thank you team members. I would like add that the principal employer has to responsibility on contractor to maintain applicable wage, attendance, workmen registers based on which the contributions can be arrived at and deducted from the bills payable to contractors. Thanks n regards/ SVS Ram
Dear Mr.Ram,
Your question is very good , to my understanding esi authorities need revenue only there is no need to form submission and workers name authorities ensure revenue only if you not paying contribution on those bills then they will issue a recovery including interest.
In case any query you can call me.
Regards
A.K.Gautam
09669200408

Dear Ram ji,
As per ESI or PF act, if the principal employer covers under theres act , if you are engaged any contract works going on your unit its automatically cover to those contract workmen also. So before you engaging any contract services in your premises you have to ensure, those who are having the PF and ESI registration code only to award the contract works. It is must. If not as a principal employer you are held responsible and entire labour engaged by the respective contractor workmens PF and ESI should be diduct the pay through your registration number.
For your clarification please see the recent notification of ESI attached.
Regards,
PBS KUMAR


Attached Files
File Type: pdf ESI-COVERAGE FOR OUT SIDE CONTRACT WORKS.pdf (135.0 KB, 733 views)


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