Harsh Kumar Mehta
Consultant In Labour Laws/hr
Kishorkulkarni
Law Practice
DilipSN
Labour Law Consulting & Outsourcing
Kknair
Hr, Ir, Law, Disc. Matters
Premkumar Nair
Manager (hr)-retired
Gopu.s
Executive
+3 Others

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Hello All,
I have a typical problem. Pls take it seriously. We had a labour contractor and he is registered in ESIC and EPF in other state instead of my state. He has raised his bill with charges of ESIC and EPF. Admin has stopped his payment of contributions and asked about subcode of our state. After working of 04 months , contractor has resigned and refused to take subcode. However how can we clear our a/c and how can we deposit the contributions. Please give valuable support.
Thanking you.

dear sir/madam, i have done MBA in HR and currently i am confused too much what type of knowledge is must for HR candidate please provide suitable tips for improving my skill for achive good job
Contractor is not willing to take sub code number under ESI / EPF in your state.
You ask the contractor to remit the amount under on his own ESI / EPF code for the workers worked in your premises and ask him to produce the challans and statement generated from ESI / EPF online portal.
Verify the challan, statements etc and if found satisfactory, your clear the bills, otherwise you hold the amount.

Sir(s),
Before awarding work to the Contractor, the establishment/factory in which you are working should have made all things clear with the Contractor. The contributions under provisions of ESI Act should have been deposited in time and now after 4 months, the same will attract interest as well as damages under provisions of said Act.
The principal employer of your establishment/factory can even make compliance in respect of employees of contractor(immediate employer) on the Code Number allotted to said establishment/Unit also. The important aspect is that the compliance should have been made and you should be able to prove the same at the time of verification of records under provisions of ESI Act/rules/regulations framed thereunder. In my opinion, the compliance in respect of contract employees can still be made at your level if the said contractor has properly maintained his records of employment and left with the principal employer.
With regards'
Harsh Kumar Mehta

Dear Mr. Yadav,

As you are aware, the contractor being the employer as defined under the EPF and ESI Acts might have remitted the contributions with the authorities irrespective of your releasing the amounts, as otherwise he has to bear the damages/interest/penalty thereon for delay.

Since the EPFO had made everything including transfer online, it is not necessary to insist for sub-code. Further, since the contractor has already terminated the contract, you may ask him to produce the proof of remittance of contributions with these authorities before release of final dues. You may also refer the matter with the authorities, after confirmation by contractor, for corroboration of remittance.

In any case, please insert a clause regarding maintenance of sub-code for ESI by the contractor in the bids to protect your interests. Of course, there exists provisions for remittance of contributions of contract labour by the Principal Employer, under the provisions of the Act, which may be invoked by you, but the liabilities attached thereto once you start with may be kept in view.

Regards

Dear sir(s).... I am very thanksful for your quick and helpful revert. In my case, contractor has deposited his esic and epf contributions on his code of other state. There is no matter for PF but what about esic. Is that as per act? How can we reply if any query ask from esic authorities? Our admin seeking a way that we can deposit this esic contribution in my state Esic. Whether it is in our factory code or anything else. If we will deposite in our code, we have not registered the IP in our code in case of contractor labours. How can I generate the Challan for this. Please clear
Sir(s),
If Contractor who worked in your unit says that he has made compliance of employees engaged by him, then it is for you/your management to ascertain from the records maintained by the said contractor. You may be having the copies of attendance and wages sheets of contractor for the period of work done in your unit premises or in connection with your unit.
As a matter of practice, the contractors after getting payments against their bills becomes unavailable and are not traceable.
You can discuss the matter with the Social Security Officer of ESIC of your area and decide accordingly.
With regards;
Harsh Kumar Mehta

Dear Mr.yadhav,
1.As rightly pointed out by Mr.H K Mehtaji, once you make the final pt,the contractor will vanish immediately.
2.The right thing to do is
a) Insist for copies of challans for the relevant months and also an acknowledged copy of Return of contributions filed for the employees employed thro you. Eventhough the contractor can make the pt anywhere in India, for the employees employed thro you he should have taken the insurance numbers thro the online also.
b) The next wisething to do is to retain 6.5% of 60 % of total payments (which would normally be considered as wages by the esic) made to the contractor and after the esic inspection pl. release the amount.Otherwise as a principal employer you are responsible for comliance both under esi &epf.
Thanks & Regards,
S.SANKARALINGAM
RETD.SR.DY.DIRECTOR,ESIC
ADVOCATE & LABOUR LAW ADVISOR

Dear all: In addition to all what is stated above, I would like to add that the contractor should be asked to produce inspection report from PF & ESI at a date later than the closing date of your work order before releasing the final payment and keep copies of the Form 6A & Form 3 under the PF and ESI respectively of the contractor and see to it that it tallies with the attendance of his labour at your works. KK
For the first time I have heard that, a contractor has to get registered state-wise..
Any contractor if he has a registration with PF and ESI Office, there is no need to go for every-state registration.
I will put the query the other way..
If a principle employer has business and branches in many states, then is he required to get registration of ESI and PF for each and every state?. The answer is No.
Same thing is with the party undertaking contract of work with a Principle Employer.
Being a principle employer, care has to be taken to watch registration of members, proper disbursement of wages, timely deposit of contribution every month etc. This can be done by using online checking status of contributions


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