Security Guards - ESI Liability On Principal Employer? - CiteHR
Harsh Kumar Mehta
Consultant In Labour Laws/hr
Puneet.sarin
Manager-legal & Finance
Ravitashukla1
Sr. Manager Hr

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Dear Seniors ,
We have hired security guards for our organization. But the agency we have hired security from is not providing us salary break-up for security.
I wanted salary break-up to check if agency is providing PF or ESI to security, because I believe if they are not providing being principle employer we may come in trouble.
We are paying Rs.13000/- for each guard.
Please guide me & suggest further.
Also please let me know which documents should I importantly collect from Housekeeping & security guard provider agencies as a principal employer.
Thanks...

Hi Ravita !

We faced similar problem. Here's what I did and then you can decide on what should suit better in your case:

1. As I'm connected with all the hired personnels (i.e. not employees) on one to one basis, so I was completely updated on what are they getting. This I did for two reasons-One, My ethical obligation and Two, even if agency failed to provide dues our company will still be liable to pay such dues being Principal Employer. So I must ensure payment of such dues;

2. I asked for signed and duly stamped and sealed statement from the vendor stating all the ESI, PF and other labour law account numbers for each of such hired personnel along with their name and confirmed this directly from the hired personnel;

3. On monthly basis, make surprise check on records and have word with hired personnel if they are really getting their dues or not.

Please note irrespective of your due payment if hired personnel is not being paid his statutory dues then also your company will be liable. So ensure due payment thereof. Your vendor will start buttering you when you will ask for evidentiary documents but that's where you will have to stand upright and ensure compliance.

As said earlier, I had sailed successfully from this position and believe me it really provides an immense feeling to see that smile on face of housekeeping guys when they tell you that they received what was signed by them on papers for last so many years.... :-)

If you are stuck somewhere again, you can reach me out.

Sir(s),

So far as compliance under ESI Act, 1948 and rules/regulations framed thereunder in respect of security contractor employees is concerned, kindly also verify following aspects from the immediate employer( contractor):-

1. Code Number allotted to such contractor by ESI authorities.

2 Whether said contractor is submitting Returns of Contributions in time to the appropriate office of ESIC in respect of all employees working in your factory/estt..

3 Whether Declaration Forms have been submitted by contractor in respect of all his employees working in your factory/establishment and such employees are having Identity Cards.

4. In case of any accident (out of and in the course of employment), whether the contractor or principal employer has submitted Accident Report to appropriate office of ESIC.

If possible, keep a copy of such documents as above alongwith copies of monthly challans paid by contractor in your records also for easy verification at the time of Inspection by the concerned authorities. Many times, Contractor leaves the contract and he is nowhere found resulting into a situation of non-production of records by the principal employer.

With regards;

Harsh Kumar Mehta

Dear Ravita,
You are aware that PF and ESI has been made online now and you need to make a request to the contractor to furnish the ESI/ PF challan generated from the system and also the summary sheet that contains the basis on which the challan has been generated. This summary sheet will contain the names of the guards who have been covered and working in your establishment.
Insist on this statement for the previous month before you release payment for the month. Also incorporate such a clause in your agreement with the respective contractor.
Alternatively, you can also ask the contractor to exclude the PF and ESI component from his wage working and suggest that you will make a payment to him upon submission of the summary sheet and challan in the subsequent month. In this manner you will have evidence that you have reimbursed the contractor the amount remitted by him for statutory dues.
M.V.Kannan

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