Dear Seniors & Friends please guide me on below point :-
If contractor submit EPF & ESIC, after its cut off date (15th & 21th of the next month). what is the liability of principal employer.
Is that principal employer liable for delay in payment & could be penalize by dept.

From India, Calcutta
Dear Mr. Gaurav,

Principally, the principal employer canít held responsible for delay by the contractor in PF-ESI contributions. Even in a recent case law, Honíble court has given judgement if the contractor has separate PF code than PE canít be held responsible (attaching the article, which I recd from here only).

I would suggest you to deeply check and monitor whether the contractor is depositing the contribution as per dedcution or not. Many contractor deduct higher PF-ESI and deposit less. Even in online process also they do by modifing the ECR, days and wages. Sometime in order to show to the PE they prepare online ECR with actual wages in r/o all employee than cancelled the ECR and prepare another one with less contribution. In such case if any workmen file case in labour court and make party to the PE as well, than you have to appear to the labour court for the hearing.

In such case if the contractor is unable to deposit the short fund (contribution) than you may be asked to compensate. In order to overcome to the situation at time of contract completion before making final payment, first ask the contractor to complete all statutory components. Wait till all employees get their fund (either withdrawal or transfer), Bonus, Gratuity, Leave etc pymt. Than ask the contractor to submit NO DEMAND CERTIFICATE (which he will obtain from getting signature of all employees).

You can demand the same certificate from the contractor to safeguard your company in the future as well.

Hope you will agree with my point, fellow members can put more light on the matter.

From India, Delhi

Attached Files
File Type: doc PE Not responsible for Contractor's PF (85.0 KB, 383 views)

Please Link the Contractor in your ESI Employer Portal.You can check online ESI Remittance position by loging to ESI Employee portal with ESI Insurance #before passing his Bill for payment, ensure both PF & ESI Compliance based on available records both Physical/Online.further, you can also take letter from the Contractor stating that he indemnifies the Principal Employer against any future liability. Put proper systems in place to track compliance by the Contractor.
From India, New Delhi
As a principal employer you can ask contractor to share their login ids and password for ESI and PF. While passing the bill you can validate their claim of ESI & PF and the authenticity of the claim.
For wrong doings of the contractor, principal employer is not liable if it is clear that he has not connived.

From India, Thane

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