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While checking the bill of subcontractors, this has been observed that the sub contractors hasn't deducted and deposited the provident fund and even not taken their PF number, however the sub contractor already been registered with EPFO.
Under this circumstances as a principal contractor what would be the way out to comply the PF rule?
Kindly share the process of the documentation to obtain from the Sub Contractors to avoid any future demand or risk towards the principal employer.

From India
Sr. Hr Manager
Labor Laws


Recently, Supreme Court observed that -Contract staff too must get PF benefits- holding that an employer cannot differentiate between contractual and permanent employees, SC has ruled that casual workers are also entitled to social security benefits under EPF & MP Act, 1952.
The order was part of SC directions to PSU Pawan Hans Ltd to bring all contractual staff under PF Scheme.
"As per Section 2(F) of the EPF Acxr, the definition of an employee is inclusive, and is widely worded to include any person engaged in connection with the work of an establihsment, and is paid wages either directly or indirectly, in connection with work of an establishment and is paid wages"
In view of above and in the interest of establishment/principal employer, as a principal contractor you can ask your sub-contractors to pay contributions towards PF in respect of all his workers and produce ECR copy alongwith his next bill, for passing the same for payment. You may strictly monitor and ensure compliance . He has to make full payment with damages /interest to PF authorities.

From India, Aizawl

Please note that onus to pay EPF contributions in respect of all category employees lies on the principal employer unless the EPF contribution term is decided/defined in the Work Order given to the Sub contractor. In case the Work Order stipulates the contractor to pay EPF, you are open to use many options including legal one and may deduct all pendind dues including fines, interest etc. in this head from the bills of concerned contractor/s; otherwise the principal employer is liable to pay the pending EPF.
Further, please obtain copy of Adhar card, PAN, bank account details and UAN in respect of all contractual employees and match the data with Challans provided by the contractor.
RK Singh

From India, Delhi
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