Amitshah
Business Consultant - Hr
Amitmhrm
Hr Practices
Raj Meritech
Executive (hr & Admn.)
S. Krishnamoorthy
Director Of Private Ltd. Companies
Arv_r123
Service
Chandrakant
Provident Fund, Esic, Professional Tax, Contract
Marut2
Hr/ir Issues Asst.mgr.
Mothinanda
Hr Professional
Harshadak
Service
Sr Laksminarasimman
Financial Advisor
Raparla
Enterprenuer
S. V. Kapoor
Profession
Dhiraj_pathk
Accountant
Adv Vicky Pathak
Labour Law Advisor
+5 Others

Thread Started by #Rachana Gadage

Hi all,
My company is hiring security guards from a contractor, we are not aware about their deduction of ESIC & PF. We are paying per guard Rs.3500/- plus service tax, as per their income contractor have to give benefit of ESIC & PF.
If they are deducting ESIC & PF then are we liable to pay ESIC & PF to goverment ?
22nd October 2007 From India, Mumbai
Dear Rachana,
ESI is contributed from both the sides Employee as well as Employer.
It is been calculated on the basis of Gross salary per month and the maximum ceiling is 10000 Rs./Month.
The contribution from both the sides is as below-
Employee Side- 1.75% of gross/month
So if gross of an employee is 8000/month then
ESI contribution would be 8000*1.75% = 140 Rupees
Employer side- 4.75% of gross/month
ESI contribution would be 8000* 4.75% = 380 Rupees.
Whereas, PF is also been paid from both the sides.. Both the employer as well as employee is required to pay the 12% of basic salary..
Out of this 12% of employer's contribution 8.33% goes to Pension fund whereas rest 3.67% goes to the PF Fund itself..
Regards,
Amit Seth.
22nd October 2007 From India, Ahmadabad
Hi Amit,
Thanks for reply
But my question is security guards which I am hiring if their employer is not deducting ESIC & PF then in any case am I liable for ESIC & PF ?
Because I think ( actually I am not sure about it) even any repairing charges or any labour charges company have to deduct ESIC.
Regards
Rachana
22nd October 2007 From India, Mumbai
Dear Rachana,
Your company is not directly required to pay these contribution with the government bodies..
You are required to check whether the outsourced company is providing these benefits to their employees or not.. as these are your outsourced employees..
So, you are required to ask to the Outsourcing company to provide the returns and all details related with the same....
Regards,
Amit Seth.
22nd October 2007 From India, Ahmadabad
Dear Rachana,
You can demand ESIC & PF Challans per month, ESI & PF Nos. of your employees, ESI & PF return or you can demand ESIC and PF details per month of your employees from your contractor so that you can check wether your contractor is depositing ESI & PF or not.
Regards,
Raj
22nd October 2007 From India, Gurgaon
Hi all, My another query is as per labour law in this situation anywhere am I defaulter? It means can goverment body take action against me if security guards are not getting benefit of ESIC & PF ?
22nd October 2007 From India, Mumbai
Dear Amit,
Your reply on Rachana's query is right, but now the salary for ESI is raised upto Rs. 10,000.00. If the employees who r having the gross salary of Rs. 10,000.00 , then he is eligible for the deduction and benefit of ESI.
Dear Rachana,
You have to ensure from contractors side that they are deducting the ESI and PF from contract employees salary and paying the same to government. For that you can ask monthly challans from the contractors. If you are not ensuring the same, during the inspection it's sole responsibility of Employers.
Thanks,
Amit Shah
22nd October 2007 From India, Mumbai
Dear Amit Shah,
Thanks.. BTW i have already specified that ceiling for ESI is upto rupees 10,000/- as a gross salary..
Moreover, dear Rachana.. yes Government body may ask you to produce the documents before them..
regards,
Amit Seth.
22nd October 2007 From India, Ahmadabad
Dear Rachana,
As a principle employer you are liable to deposit ESI & PF. If ESI & PF authorities find anything wrong in that position Principle Employer is liable for these payments and they will tell the principle employer to deposit the amount but principle employer can deduct the same amount from the contractor bill.
Thanks
Raj
22nd October 2007 From India, Gurgaon
Hi all,
All of us understand that compliance of ESIC & PF is must and therefore all the contract workers and direct employees must be covered under the act (according to the law). But my question is that in our company we are appointing various service contractors for providing service on site, so in few cases the contractor visits only 4-5 times in a month(2 to 3 Peoples), are we required to deduct PF & ESIC contributions?
regards
Arvinder Rawat
23rd October 2007 From India, Visnagar
Hi Rachna, Please go through the answer of Mr. Raj which is very appropriate answer. It is the responsibility of principal employer to ensure the compliance. Regards Satish
23rd October 2007 From India, Baleshwar
Hi all, ESIC is must for labour covers under the law But what if the employee is not ready to undergo deduction becase i am facing the same problem in my company. Harshada
26th October 2007 From India, Pune
Dear Rachna,
Always remember one thing that whenever a contracter is hired than as a principle contractor liability remains with you only,so you have to check wheather those statuatory compliances are complied or not but their are ways to have a way out of it.
21st December 2007 From India, Gurgaon
Dear All,
Pls advise about ESI & PF deduction on contractors bill, in which condition we will deduct the ESI & PF and what is deduction percentage on bill amount and which case we have do not deduct the PF & ESI of contractors.
Pls tell me brief.
Rgds,
Rakesh Roshan
14th March 2008 From India, New Delhi
Dear Rachana Gadage,
Refering to your query on PF & ESI relating to security guards out sourced by your company, you as a principal emplyer is liable under PF & ESI Act. The principal employer is not absolved from liability under these Acts if there is any failure on part of contractor( security agency company) The best option is to ensure that the contractor is complying with the provisions of PF &ESI
27th May 2008 From India, Madras
Dear Amit Seth,
I want to know if employer recruite direct employee on fix contract rate than statutory deduction i.e. PF,ESIC are needs to deduct
But What about PT & TDS ?
We will deduct TDS U/s 192 or U/s 194C as per Income Tax Act 1961?
Because They are only fix amount and theire are no any perquisite
So, Please suggest me
Thanks in advance
Regards
Dhiraj
23rd June 2008 From India, Mumbai
it is very much your company's responsibility to ensure that ESI & PF is deposited for the Security gaurd or any other person working under any contractor in your company. If the contractors establishment are not depositing then it is very much your responsibility to pay the deposit. You do not have any escuse for the same.
Regards,
MOTHI
25th June 2008
Hi
Im Niladri, new joinee in a company who are working with quality analising of raw material and they are hiring contrac employees from core area of all over India mostly from eastern region as per daily basis
so I cannot understand how can I deduct ESI for them
Please reply
26th July 2008 From India, Calcutta
Dear Friend,

While engaging Security Sevices through a contractor or outsourcing agency, the employer has to make an agreement between the employer and the contractor. While entering to a contract the employer advised the contractor to produce the copies of Registration Certificates under the staturoty provisions of Contract Labour (R & A) Act - 1970, EPF Misc.Provisions Act - 1952, ESI Act - 1948 rules with in two weeks from the date of commencement of work. The contractor has also submit the copies of chalans under PF & ESI every month and maintain all statutory records and registers under the provsions of the said enactments.

If he fails to produce the above documents the principle employer is responsible to comply under the provisions of the acts and deductthe amounts of contribution under PF & ESI from his account and pay the balance amount to him. Don't engage such contractors and out sourcing agencies with out fulfilling the above norms.

In your second quiry the employer has unable to fulfil the payment of contribution under the provisions of PF & ESI Acts, he is liable to pay the conributions along with penal damages, interest and imposing penalties and prosecutions under the said acts.The amounts to be recoverd from the employer's movable and unmovable proporties and also ceise their bank account transactions by the department as a defaulter.

This is for your kind information.

Regards,

P.V.Rama Rao
26th July 2008 From India, Hyderabad
Dear Sirs,
we employed two persons recently on fixed salary basis. this is a short time duration job. Work is Outside the factory premicess. This is for fabricaton & procurement of certain machinery.The monthly payment is made by voucher. Our factory is covered under PF & ESI.
Do we need to deduct PF & ESI for these Two persons also. As the job is purely on temperory basis, the employees are not willing to dedeuct the same. what is the alternative.
Learned freinds may please help us by giving their openion.
-RAPARLA
26th July 2008 From India, Visakhapatnam
See their quotation and the breakdown given in it. The first column should be pertaining to MINIMUM WAGES (as applicable). In the columns that proceed, deductions of ESI & PF would also be there. In the end it should be the Service charges and thereafter the total figure of RS 3500/-.
Also ask the Security Service provider to deposit a copy of ESI & PF challans to your dept every month. It will ensure that as a principal employer you are adhering to all statuary and legal compliances.
27th July 2008 From India, Delhi
Hi Rachana
If the contractor is deducting ESI and PF then the company is not liable to pay the same. but if the contractor deducts the contribution and does not pay then the company is liable to pay since its an principle employer.
for your safe side what you have to do is to ask for the half yearly returns of esi and annualy returns of pf in which the names of employees emplyed by the company through the contractor is specified and the copy should be preserved by the company for inspection
regards
adv vicky pathak
20th December 2008 From India, Mumbai
Friends in Chennai!
We are experiencing some peculiar hassles in making payment of ESI and EPF contributions in the branches of SBI in Chennai. Though the cheques are presented with the challans well before the due mandatory dates, the staff in SBI do not receive the cheques immediately but ask the messenges to drop it in the drop box. The cheques are cleared for clearance after a week or so and the date stamp of the SBI is also affixed later. When taken up with the Managers, they plead helplessness citing acute shortage of staff as a reason. This happens almost every month. Though reported to ESIC, no action has been taken by them.
If any others in HR of other companies are experiencing such a diffidulty, how do they tackle it?
One way out is to make advance payment of contribution to ESIC and adjust the deposit every month.
What should be do, if we are unable to make advance deposit to ESIC due to cash flow problems?
Can this be taken up with the SBI Ombudsman?
Regards
S.Krishnamoorthy
21st December 2008 From United States, Roslindale
Dear Rachana, Most important thing is that you are pay that employee below minimum wages, Your need to check weather the Contractors has registered with PF, ESI, PT
22nd December 2008 From India, New Delhi
Dear All,
My companies corporate office is in mumbai and branch is in Chennai. Mumbai Corporate office registered with ESIC code no. but needs to take the ESIC Sub code no. in Chennai.
Can anybody tell me? that can we make payment of Branch ESI in mumbai.
Thanks in advance for your help.
23rd December 2008 From India, Mumbai
principal employers are responsible for deduction of contractors. Normally what companies do that they obtain ESI no of contractors and dont deduct,and when there is no ESI no they deduct and pay on behalf of contractors.
sudarshan
29th May 2009 From India, Madras
I would like to know about labour laws in madhyapradesh. and min. and maz. rate skilled and semi skilled labour rate latest and update. pl give me reply Thanking you
29th November 2009 From India, Indore
We are autonomous body of ministry of Agriculutre, we are undergoing a security contract of nearly 15 persons since last 12years. Nearly every year the contractor has been changed. Now one person who is working under every contractor continuously since then. He needs his PF. Some of the contractors did not deposited his PF. What is our liability? We need to help him? As he is in need of his money.
Please help.
Sunil.
24th December 2009 From India, Pune
Dear All
Kindly let me know if the Company is required to deposit ESIC for the Retainers engaged by the Company for period of 6 to 12 months, whose TDS is deducted as contractor (194c) and what if TDS is deducted as professional fees.
Further can we employ persons as retainer on contract basis for temporary sales promotion jobs for our Client in nos like 1000, 2000, 3000 or they should be appointed as employees only. In this case shoud the AD Agency needs to register under Contract Labour.

Further please let me know the labour law compliances that a service co needs to do, who is employing more than 3000 emloyees.

Seek your opinion please
regards
SVK
3rd April 2010 From India, Mumbai
hi Rachna,
principal employer responsible for Deduction of P.F. & ESi, of contractor's employee, if contractor have his own p.f. code or ESi code and then you will ask for xerox copy of P.F. & ESI Challan.
Harshad Patel
12th April 2010 From India, Ahmadabad
Regarding this contact 9414359895,MR Guruvinder singh ( chief consultants), Bharat personal services,jaipur
13th April 2010 From India, Jaipur

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Hi Amit..
As per rule
The contribution from both the sides is as below-
Employee Side- 1.75% of gross/month
So if gross of my is 7500/month then
ESI contribution would be 7500*1.75% = 125 Rupees
Employer side- 4.75% of gross/month
ESI contribution would be 7500* 4.75% = 356 Rupees.
Now My question is above 125 rs is deducted from my salary as well as
356 Rs is also deducted from my salary on monthly basis.
Both deductions are done form my salary..
Is it right?
Please reply me...............
=================================

17th April 2010 From India, Ahmadabad
Here one thing we want to add that at the time of the inspection of the books by the ESIC Inspector , he always see the records of the security guards & related papers so , pls ensure to received the ack copy of ESIC & EPF deposited on behalh of Co. to avoid the letigation .
Regard ,
AKB

17th April 2010 From India, New Delhi
hai, me virendra,
I am newly join in this site.
i am working as Labour officer in a textile industry where labour adjustmet is a main work but it is not a proffesinlist work for MSW holder so i want to get knowledge of HR/admi. work. so please all of you help me and send me first a set of all legal compliances forms format under various labour act.
23rd May 2010 From India, Ahmadabad
Hi all
i am a student of MBA HR . i was just reading about ESI from this cite . i came across this interesting discussion. pls seniors clarify me .why would security guards pay for ESI because often security guard`s gross monthy salary is less than 10000 per month .like max 5000/ mon . so how are they eligible for such deduction .pls reply i want to know it
thanks
9th June 2010 From India, Shahkot
Hi all
i am a student of MBA HR . i was just reading about ESI from this cite . i came across this interesting discussion. pls seniors clarify me .why would security guards pay for ESI because often security guard`s gross monthy salary is less than 10000 per month .like max 5000/ mon . so how are they eligible for such deduction .pls reply i want to know it
thanks
9th June 2010 From India, Shahkot
dear all, ESIC limit is now 15000/- p.m gross salary and if contractor paying salary to guards then only he is liable to pay PF & ESIC for guards.
9th October 2010 From India, Mumbai
hi, i wanted to ask that when a employee leaves the organization say within a span of a year and half then will he liable to get his pf amount back that is been deducted from his salary during his employment period? or is there any law as such that the employee gets back his pf & esi amount only after he completes a particular duration in his company.
26th November 2010 From India, Delhi
Hi In your case, if your company is already covered under ESI/PF then you must ask your contractor to cover the site employees. Otherwise you will liable as Principal Employer. K Gowri shankar
28th November 2010 From India, Madras
Hai Raj Meritech Amitmhrm Rachana Gadage By your constructive discussion I had learned many things regarding EPF and ESI . Thank you very much. With regards Dhananjay 8095674711
28th November 2010 From India, Bangalore
It is not material for ESI whether the casual employees - either employed by the Company or of the contractors - work for a day or more in a month. The employee and employer contribution on the wages earned by them must be remitted.
2. As a principal employer, it is the duty of the company to ensure that ESI contribution of the contract employees is paid together with the employer contribution.
3. Obtain the ESI code assigned to the contractor. Obtain the statement of employees in respect of whom contribution is paid. Find out whether the contract employees names who work with your company do figure in the statement.
4. Keep this statement as a permanent record to be shown to the Enforcement Officers of both ESI/PF.
5. Mind that the ESI and EPF are social security measures and the Companies should strictly abide by the extant rules.
S. Krishnamoorthy
29th November 2010 From United States, Roslindale
Dear Rachna,
i am agree with MR. Amit Shah,
You have to ensure from contractors side that they are deducting the ESI and PF from contract employees salary and paying the same to government. For that you can ask monthly challans from the contractors. If you are not ensuring the same, during the inspection it's sole responsibility of Employers.
Regards,
Harshad
30th November 2010 From India, Ahmadabad
copmpany fired me from job and i file a case in labour court . Till how many days esi facility can I use after leaving job.
23rd March 2015 From India, Delhi
Uttarakhand Dehradun , Rishikesh, Haldwani , Rudrapur , Ramnagar, Haridwar, Nainital me bhi security guard company pf Esi nahi deti
15th November 2018 From India,
Hi Rachana
If the contractor is deducting ESI and PF then the company is not liable to pay the same. but if the contractor deducts the contribution and does not pay then the company is liable to pay since its an principle employer.
for your safe side what you have to do is to ask for the half yearly returns of esi and annualy returns of pf in which the names of employees emplyed by the company through the contractor is specified and the copy should be preserved by the company for inspection
regards
Avinash
Humn Resource
Alwar, Rajasthan, India
26th April 2019 From United States, Benton Harbor
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