Contractor has not paid salary to its employees - Is there a provision of any penalty, as per the acts? - CiteHR
Rkn61
Hr Manager
Kritarth Consulting
Spl Educators Posh Programs; Hr & Ir
Nathrao
Insolvency N Gst Professional
Ssushr
Pune
JIGNESH ACHARYA
Public Service

Cite.Co is a repository of information created by your industry peers and experienced seniors sharing their experience and insights.
Join Us and help by adding your inputs. Contributions From Other Members Follow Below...
As per Factory Rules & Contract Labour Act, salaries need to be paid to staff by 7th of the following month. In my case, the contractor has still not paid the salary for the month of Nov.2019 though today is 26th Dec.2019. Is there a provision of any penalty, as per the acts, that can be imposed on the contractor ?????
As per the provisions under Payment of Wages Act, 1936 wages needs to be paid-
Before the expiry of the 7th day after the last day of the wage period, where there are less than 1000 workers employed and in rest case on the 10th day;
In current coin or currency notes and by cheques or by crediting the wages in the employee’s bank account after obtaining his written authority;
On a working day;
Before the expiry of the second day, to the person whose employment is terminated.

The Principal Employer is liable to pay the Due Wages to the Contract Labours eemployed/engaged by the Contractor. And to prevent such Liability/Eventuality the Principal Employer's Employees Exercise Due Diligence in Short-Listing Reliable Contractors who will Not Default in CL's Wages Payment and Will Keep the Principal Employer in Loop / Picture in case Wages Payment Process is difficult
Kritarth Team, Bengaluru Office
26 Dec 2019

Principal employer will be liable to make the payment in such cases.PE always cross checks payment done by contractors to their employees by verifying PF,ESIC payments etc.
In such cases PE should directly pay the contract employees after documenting the lack of payment and other issues by contractor and pay balance if any to contractor for the contract charges.

Even if contractor fails to make payment of salaries to their staff, the onus of responsibility rests with the Principal Employer. Have you passed the monthly bill of contractor? If not, hold it on, till they make payments. If contractor's bill is passed for payment, and then he (contractor) is not making payment, principal employer may pay their salaries and the entire amount to be recovered from their future bills.
Section 21(4) of the Contract Labour (Regulation and Abolition) Act 1970 provides that if contractor fails to make payment of wages within the prescribed period or makes short payment, then the Principal Employer shall be liable to make payment of wages in full or the unpaid balance due, to the contract labours and recover the amount so paid from the contractor either by deduction from any amount payable to the contractor under any contract or as a debt payable by the contractor
Please Login To Add Reply






About Us Advertise Contact Us
Privacy Policy Disclaimer Terms Of Service



All rights reserved @ 2020 Cite.Co™