Harsh Kumar Mehta
Consultant In Labour Laws/hr
Azhar Ansari
Account & Payroll Executive
NAMAN_DUTT
Service
Pasupathieswaran
Retired H R Professional
Santu_6094
Hr Executive
+1 Other

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Dear Experts,
I have a query regarding PF and ESI calculation for a part time employee.
If a company hire a part time employee to work 2 days in a week or total 8 days in a month basis and paying Rs. 7000/- p.m. as salary to him, what will be the calculation of PF & ESI payment and how company will show it is in its PF & ESI return, means, in the case of regular employee, the days count are 30 or 31 in return form but in case of aforesaid part time employee, what will be the correct treatment?
Thanks & regards,

From India, Delhi
Hi Naman,
I'm not an expert but according to me you may calculate his salary for 30 or 31 days. Like 8 days = 7000/- means Rs. 875/- per day (In case of 30 days) which equals to Rs. 26,250/- per month.
Now as per Govt. rules, pf contribution is applicable for Maxm Rs. 15000/- per month (Basic + DA).
So you have two choices, first, consider Rs. 26250/- inclusive of Basic n DA then you don't need to pay such contributions, second, consider the basic + DA amount lesser than 15000/- and rest to other allowances.
We are following the second choice in our Company. Like if Gross Salary = 25000/- pm, then Basic + DA = 60%*25000, HRA = 40%*Basic and rest count into Other Allowances.
Hope it may be helpful to you.
Regards,
Azhar Ansari

From India, New Delhi
hello in this case you should hire him on contract basis and show pf esic returns on number of working days in a month with your organization.
From India, Hyderabad
1. Sir, how will you define and confirm that a person you employed as a part-time employee is really a part-time employee ? If a person is working only for 2 days, in a week, then he can also be working as a casual or temporary or a badli employee/worker. Can you prove that the said employee in other days of the week/month is also working in some other unit/factory ?
2. If a employee is working in other units also, and you can prove and his total earning or wages exceeds Rs.15000/- per month, then I think, you can establish that the said employee is not coverable under ESI Act, 1948 and rules/regulations framed thereunder.
3. As a regular feature or practice in industry, you can see there are number of persons working in part-time viz.- labour law consultants, Accountants, etc., who actually work for a number of units. Every case, I think, will depend upon facts of each case separately.

From India, Noida
Dear Mr. Naman,

The solution of the whole matter depends upon ur approach. You have to take care the laws applicable for each snenerio.

Like, if u really want to cover the person/ under Social Security System (PF-ESI, Bonus etc.) u can treat him as an employee.

But as Mr. Harsh suggested "how will you define and confirm that a person you employed as a part-time employee is really a part-time employee ? If a person is working only for 2 days, in a week, then he can also be working as a casual or temporary or a badli employee/worker. Can you prove that the said employee in other days of the week/month is also working in some other unit/factory ".

So you have to first ask him whether he is not covered in PF-ESI in any other orzanisation.

You can ask him to submit a request letter from his side to cover himself under PF-ESI. In ur legal support, u can take declaration from his side on judicial stamp paper. In the declaration he will submit, the information provided by him are true, if any stage/time the declaration proved false his employment and Statutory coverage will deemed to be withdrawan etc.

But pls be noted, coverage under PF-ESI can also lead to entitle him under Bonus Act, Gratuity Act, ID Act. Employee Compensation Act etc (depend upon ur relations and circumstances).

In second case, if u don't want to get him under any statutory compliances, pls place a WO to sign an agreement with him in which u will appoint him as a Professional. In the agreement u can decide Price of Work, Basic of calculation (no. of day, job done, extra work etc.), payment terms, period of contract.

In the agreement it will be specifically mentioned that he is engaged as Professional and he will never deemed to be employee in the company.

But while releasing his payment you have to dedcut TDS (depend upon total volume in a F.Y.). He can claim refund of the TDS after submitting Income Tax Return.

(if his total remuneration in a F.Y. will be less than taxable income).

Hope this will meet your requirement. Fellow experienced memebrs can correct me, if any gape found.

PAN SINGH DANGWAL

From India, Delhi
From the statement he is paid near around Rs.900/- per day (you had stated that for 8 days you paid him Rs.7000/-) therefore his rate of wages exceeds Rs.15000/- per month and therefore he is not a person cover able under the ESI Scheme. You can write this to the ESI authorities and get the same confirmed.
From India, Chennai
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