Ashu HR

Hi All,
I am associated with a firm who is working on government projects.So, we have to hire contractors for the work to be done for various sites and the contractor for their convenience engage daily wage workers on the concerned sites and not deducting PF and ESIC of the daily wage employees.
So, My question is,
1. Are the daily wage workers also covered under CLRA Act?
2. Whether the contractor should deduct PF and ESIC of the daily age workers or not?
3. Are we liable to overlook the compliance fulfillment of Sub-contractors?

From India, Delhi
Pan Singh Dangwal
Joint Manager
Ashu HR
Assistant Hr

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Pan Singh Dangwal

I also deal with such cases, but our sub-contractor don't hire workers on daily wages. In our industry we prefer to hire permanent employee under sub-contractor's scope. If the nature of work is hazardous or risk inherent I would suggest to engage such sub-contractors who can deploy permanent employees and can comply all statutory benefits. May be due to cost reduction or making margins the contractor is engaging daily wages worker. But as a prime contractor you should avoid such situations.
Pls note my reply:-
1. If you have considered those Nos in your / contractorís Labour Licence than such workers must be covered under CLRA and need to consider their detail in Half Yearly Labour Return / Annual Return under Shram Suvidha.
2. As per my opinion though primarily deducting PF-ESI is depend whether the sub-contractor is covered under PF-ESI or not. If covered, than those deduction are must. But if not covered than you must take an indeminity bond from the sub-contracotr duly stating if in future (even after contract closure) any liability arises due to PF-ESI or such compliance than the sub-contractor will be solely responsible for the same. As stated above if the work is risk inherent activities, ask the sub-contractor to take EC Policy for required No. of personnel deployed at site. By doing so, if any worker met with accident which lead to Death or Disability, he will get compensation from the Insurance Company / Compensation Board. Otherwise it will lead to huge cost to you and to the sub-contractor.
3. You canít escape by overlooking the compliance fulfillment. Being prime contractor you will be responsible for all activities of your sub-contractor/s. In govt projects, they defined hard terms in the agreement, but donít focus so much. But in case of any happening put all the pressure of us (Prime Contractor). So we need to be more focused while engaging any sub-contractor.
Additionally I would advice, first check whether the complaince cost (PF-ESI, Bonus, Leave, Gratuity etc.) have been included in the WO value (Agreement issued to the sub-contractor). If so, than you are in double loss. If such cost not considered take your management call whether to include such cost and make strict compliance. If they donít want to increase cost and avoid complaince level than in long run it can be harmful.
I have given detailed reply of your short query. That is due to my personal experiences.
Seniors can throw more light on the matter.

From India, Delhi

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