We are a manufacturing industry, can we transfer the payment of wages directly from company account to the contract workman working on daily basis through contractor.
From India, Delhi
Industrial Relations And Labour Laws
Hr Manager

Direct payment of wages to contract labour shall be done only in special circumstances like non payment of salary by the contractor. On a regular basis if you do it, in future it will lead you to make the contract sham which is very dangerous legally.
From India, Kannur

It is not advisable to transfer money from company to contractor workmen, as this shall form a direct employee-employer relationship between the company and contractor workmen, thereby you are indemnifying your contractor from his statutory obligations towards his workmen. Why do you want to do this? As a principal employer you have N number of responsibilities. Why do you want to shoulder this burden also?
You pay your contractors monthly bill. Let him pay salaries/wages to his workmen.

From India, Aizawl
To ensure proper payment of wages , you may pass bill of contractor after ensuring payment of wages to the workers as per Minimum wages Act and also payment of legal dues of PF, ESI P T etc by the contractor. If contractor fails to produce the above documents alongwith bill then you may hold his bill and if there is any less payment or non payment then you only you can excercise your power under Section 21(4) of the Contract Labour (R & A) Act 1970 and pay the due amount to the worker. When you have engaged a contractor, let him do his duties as Contractor. Direct payment of wages to contract labours every month of Principal Employer will invite problem of demand of regularisation of contract labours in your company as rightly advised by the learned friends above.
From India, Pune
You should not transfer any wages or any payment direct to the bank account of workers of contractor. If you do that, it will create problems in future i.e. the employees of contractor will claim that they are the employees of principal employer and if the contractor terminates their services, they can raise industrial dispute against principal employer also and the Labour Court, in such cases, treats the contract as sham and can order reinstatement in the services of the principal employer.
Likewise, the employee can raise claim under Payment of Wages Act, Minimum Wages Act or Payment of Gratuity Act against principal employer.
- Shobhit Kumar Mittal
Labour & Industrial Law Advisor
8077779793, 9319956443

From India, Faridabad

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