Madhu.T.K
Industrial Relations And Labour Laws
Kamalkantps
Advocate
Lakshmi87*
Agm - Hro, Compensation & Benefit Mgt,
Karthikcrown
Human Resource
Rameshkrishna84
Assistant Manager-hr
+4 Others

Thread Started by #sac_mak

Our company wants to recruit near about 500 resources for whom salary is Rs. 5000/- pm. Can any of you guide me how can we pay them the salary? We have to pay Rs. 5000/- pm to them without any deduction. Should we hire them as consultant or should we hire them as Employee? If as consultant then what are the formalities which need to be follow?
21st August 2012 From India, Delhi
The only available trick is that appoint them as part time employees. But if any of the employee compliant then you will be in a trouble.
21st August 2012 From India, Kochi
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22nd August 2012 From India
You can take them as consultant on contract basis and give them whole amount without any deduction.
23rd August 2012 From India, Mumbai
Even if you appoint contract labour also the statutory such as minimum wages, PF , ESI,Bonus etc...should be covered . In case if the contractor have not paid the same then the principal employer will be responsible for the same.
23rd August 2012 From India, Bangalore
You may conduct campus interview and recruit as Trainees with Stipend mode of payment. You may also recuit them through a third - party and agency or a consultancy.
23rd August 2012 From India, Calcutta
You may recruit them as Trainees with consolidated salary or stipend.
You may empanel with a third-party (agency/consultancy) & recruit through them.
You may also recruit them as part-time staff or seasonal staff.
You may recruit them as contract staff under your payroll itself as 'Fixed Term Appointment' where your mode of payment is similar to a consolidated salary with Basic & Hra only.
23rd August 2012 From India, Calcutta
Dear All,

I have seen different views on the subject. Please first keep in mind if your 5000 is not less than minimum wages. However, you engage them but if they are not getting minimum wages you are legally and morally wrong. Also by avoiding their statutory benefits you are again doing wrong with them. If their work is part time you can engage them as part time workmen but if it is truly part-time. Please understand that while taking work full time and paying less is morally and ethically wrong as in such case you are only coercing them. They are the one who earn you profits.

Professionally speaking i will not advice you to get into this as you might end up getting in to trouble with just one complaint to Labour Department and/or various Authorities. Also see denying only ESIC itself, which is other applicable on them in any case, may lend you in deep trouble if one inspection happens. Also this will deny the employee such a health benefit which otherwise he should get. Hence rather then promoting such things we as HR fraternity should condemn such arrangements which are anti-employee.

Hope you all consider this view.
23rd August 2012 From India, New Delhi
Hi
Hire as inturns thru institutions or hire as an apprentiee.
would like to understand why your company do away from certain welfare acts which protect employee and employer from certain risks. Minimum Wages Act will make to pay wages as per act. the amount of wages you proposed is much below the wages defined under MWA. If one do not follow the basic rules of the coverage of acts, the risk is unimginable. however, as a HR guy , you should convey your peace of mind to the managerment, leave the rest.
23rd August 2012 From India, Hyderabad
Dear All,
Recruiting people as a consultant is quite problem. The organisation will pay them a Professional fees to the consultant and for the same the organisation is suppose to deduct TDS as 2% or 10% as applicable. And the company has to issue Form 16A for the same every quarter by filing the 26Q.
If you recruit them as a contract employee even then also the principle employer is liable to pay ESI and PF for the employees deployed. You can even recruit them as a trainee and pay them stipend for the probation period (training period) alone and also you cant keep them as trainee for a long period of employment.
The above said is as per knowledge if anything wrong kindly advice me.
Regards,
Karthik.D
23rd August 2012 From India, Madras
Dear friend, As we are not calculating ESI on stipend, so u can proceed with taking them as trainees.
23rd August 2012 From India, Mumbai
By whatever designation you appoint, at the end of the day, you will have to pay them ESI, EPF, welfare fund, leave wages, bonus, minimum wages as per statute etc etc. Then what is the logic in engaging 500 consultants? That itself shows that it an attempt to reduce burden. After all, they are engaged to get an end result. Then why don't you comply with statutory requirements?
Madhu.T.K
23rd August 2012 From India, Kannur
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