3 Labours come for 2 hours work on an alternative day basis. They do the work in many factories every day. They take payments in cash. Now how to show such workers in ESI/PF when they work for several factories all at the same time?
From India, Bengaluru

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if their payment is made as "Wages/Salary" and attendance is made in muster roll, then they would be treated as regular employees. it is upon the employer to depute them for 8 hrs work or leave them early,
if they do no draw wages/ salary, then they would be contract labour for which they would submit the bill and take payment
However if this amount is found in books of accounts on head salary or wages then the department will ask for contribution

Yes, they give bill and take payments in cash. Factory is planning to pay them online. The bills are shown in books as service expense. So, now how to contribute if they work for several factories?
Which factory should contribute, since I assume all factories cant contribute ESI/PF for a person at the same time?
Also, please guide me on how to convince them for deduction of their part of contribution, since they would not accept any deductions in their bill.
Note: They take payments on daily basis, and sometimes on a weekly basis.

From India, Bengaluru
@ Shanti019

If there bills are shown as Service Exp, pls note the below points:-

1. If the bill value (monthly/annual) comes under TDS Act, than TDS must be deducted (as per applicable sections/s). Ask them to submit their PAN, otherwise higher TDS is applicable.

2. It is advisable to issue an service agreement (duly mentioning all commercial, statutory & legal terms.

If you want to cover them under PF-ESI than note the below points:-

1. Their wages needs to be booked under single factory (Same PF-ESI Codes).

2. The Wages must be as per MW Act.

3. It is observed such labours never interested to reduce their Net Amt/Take Home Salary, so you have to increase their wages.

4. After covering them as an employee, it will attract other liabilities as well (Bonus, Gratuity, Leaves etc).

As per my opinion make a thorough observation if you can give full time work (if they can be engaged in other tasks as well) than only go for PF-ESI, otherwise continue them as Contract for Service. But strictly follow above mentioned basic points.

From India, Delhi
This is a complicated situation when any one working more than one organization and paid through voucher. The best solution may be that those employees should be engaged through good contractors who will deal with the respective PE and to take care proportionately about statutory compliance - PF, ESI, Gratuity etc. under the codes of the contractor. But that will also be complicated process and one has to take pain to resolve this type of situation.
S K Bandyopadhyay ( WB, Howrah)

From India, New Delhi
@Pan Singh Dangwal and Glidor Sir,
Sir, can you guide me how to make a service agreement or contract for service for these workers work with the factory. The workers are not interested in doing full time job because they like to work only when they wish to. The factory is concerned if not deducting PF/ESI will bring them any trouble because all full time employees have PF/ESI and if department inspection happens, the owner thinks that the factory and he may be in trouble. Is there a way where I can draft an agreement so that factory does not have PF/ESI issues.

From India, Bengaluru

They have to be reckoned as self employed contractors. Once you are able to establish them to be self employed contractors, then their PF & ESI liability will not fall on you. But a proper service agreement linking their service charge to the work done has to be made. The documents on the payment to them shall also be to the same effect and importantly, shall not be linked to their attendance. To help you in drafting the service agreement the nature of work performed by them and their work linkage to the factory operations are needed.
From India, Mumbai

from the discussion it emerges that the these workers are permanent basis working in some establishment, but work here on part time basis,
Till now the operational nature of factory is not the Main role of permanent employees viz the temporary employees are not clear
for principal activity of the workshop/ factory, the employer has to arrange the full time employees,

The workers those who are coming to work on alternative day for few hours of working can not be considered as regular workmen of the factory. Do not issue any employment card and Gate Pass to them and get them entry to factory on temporary gate pass for 2 or 3 or 4 hours mentioning entry time. Do not show their name in muster roll. You did not mention the nature of work they do.
From India, Mumbai

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