DilipSN
Labour Law Consulting & Outsourcing
Kishorpp
Statutary Consultant
Essykkr
Statutory Complaince/labour & Employment
+3 Others

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We are a Civil Repair Contractor and have currently undertaken Repairs of a certain Principal Employer. We have the following query:

The Principal Employer is asking us to add Labour Cess in Our Bills, although this was not discussed while finalizing work nor is it mentioned in the Work Order. We have less than 20 labours working at the site so we are not covered under the contract labour act. Also, since our organization has less than 20 employees we do not have any ESIC or PF numbers.

1. How can we add labour cess in our bills, if we do not have a contract labor license?

2. Can the Principal pay the labour cess on our behalf? If so, how?

3. The Principal Employer is telling that paying labour cess is mandatory, so kindly guide how can this be done given the above conditions?

4. If, Principal Employer is engaging more than 100 employees whether it is compulsary for all contractors to have contract labor license and other compliances irrespective of the contractor's manpower strangth?

Please guide and advise. Our payment is getting held up due to no clear picture on above issues.

Thanks!
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First of all would like to clear that Labour Cess is payable under Building and other consutruction worker's welfare cess act 1996, not under Contract Labour Act ( R&A) Act 1970. which as per your query i feel misconcived.

BOCWWC Act provide 1% cess on the total cost of contruction by the Employer under BOCW Act.

And BoCW Act is applicable wherein if you have deployed 10 or more building workers in any establishment. As per Act it has to be paid by the owner of establishment either directely or throught the contractor enganged by him, because " contractor" also treated as employer under BOCW Act.

This Labour Cess which Principle Employer is asking to be add in bill , after completion of work has to be submitted to the welfare board constituted under BOCWW Act.

Contract labour license has nothing to do with Cess, contract labour license applicability is 20 workers or more in majority of states but in some states its 10/5 also ( AP/Gujarat/WB).

BOCW Act applicability is 10 or more workers, if you have deployed less than 10 workers than BOCW Act is not applicable to you and no point of adding Cess in your bill.

Regards
Thank you for the Reply. This was very helpful
We have 12 -15 workers working on the site. So we need to add labour cess in our bill as suggested by you.
We are working in state of Maharashtra. So i have following questions:
1. If we pay the labour cess to the Welfare board after collecting it from the Principal Employer, then what compliance is required from us (the contractor)?
2. Do we require any kind of registration OR any Number to pay the Labour Cess to the Welfare Board? If yes, then what?
3. If the Principal Employer Pays the Labour Cess on Our Behalf, do we (the contractor) require any kind of compliance like ESIC / PF , etc?
Kindly clarify.
Thanks a lot!
Dear Sir,
You should obtained Registration Certificate under Building & Other Construction Workers Act from Labour Office & your civil construction workers also to be registered under the Act and do compliance under the said Act.
PF & ESIC is are different issues, ESIC is not applicable to construction workers, PF is applicable. Contract Labour License under Contract Labour act is not applicable to you as deputed employees are less than 20.
Regards,
Dilip Nandanwar
For Vidarbha Industries
(Labour Law Auditing, Consulting, Statutory/Legal Compliance, Payroll Outsourcing & Mgmt, Manpower/Staffing and Govt./Rly. Contracting)
Navi Mumbai
Branch Office - LGF-69, Sanskritik Sankul, Zansi Rani Square, Sitabuildi, Nagpur.
Mail Id-
:-c +91- 86555 76111
As suggested by fellow member, you have more than 10 employees working for civil construction work, than you need to get registration certificate under BOCW Act, For assesst of Cess, labour authorities may ask for registration certificate under BoCW Act.
All Compliance under BOCW Act has to be done by you in respect of workers employee for such construction activities.
PF & ESI are two different issues, as ESI Act is not applicable for construction site workers.
If you have more than 20 workers as a whole in your orgnisation may be working for other clients ( as at this site you have 10/15, PF not applicable) than PF shall be applicable.
Regards
Dear Sir, You have too fill up beneficiary form your site workers and submit to Labour office , for employees benefit,
Dear All
The Honorable High Court Of Karnataka in the case of Toyota Kirloskar Motors V/S Labour Commissiner has held that The Building & Other Construction Workers Act is not applicable to Factory buildings.
Regards
G Y Suhas
Head HR, IR & Admin
L&T Construction Equipment Limited.
Byatarayanapura
Bangalore - 560 092
Email
I m working with construction company, and deducting Rs 10/- of each employee +Rs 20/- from employer total Rs30/- sending to Labour welfare commissioner, chandigarh, HR
Is this complesury to deposit the same, other side we are depositing 1% cess amount in BOCWW act.
Pl your openion
Valuable feedback by all of you.Non compliance may end up in legal actions like penalty, suspension of licence, imprisonment etc and other by way of bad corporate governance. Get registration under BOCW Act by labour authoeity & do the compliance accordingly.
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