Keerthana Chandrasekar
Dear Team, We have a certain department at our firm where we hire workers through Contractors for certain number of days. They are paid based on Daily wages. For certain days we hire Fewer numbers and at certain days more numbers, again based on the Project requirement. My question is, at the end of the month while the Contractor provides us the Invoice, they Calculate Government Holidays as Paid Holidays(PH). as per the definition of contract, we need to pay them for the number of days worked.

Is It eligible that we as an employer should pay them for PH?

Because what I felt was These contract Labour's direct employer is the contractor who is eligible to pay PH.
Need your guidance regarding this topic and also If possible is there any legal provisions regarding the same.

Thank you !!

From Germany, Georgsmarienhuette

Dear Colleague,
What I understand from your writeup is you are meaning " National and Festival Holiday" as Government holiday. If it is so then:

The Contract is the employer for the Contract Workers. For his establishment the Contractor has to extend the National and Festival for the eligible employees and obviously the cost will be charged by the Contractor on the Principal Employer. Many State Governments enacted Law to extend National Holiday and number of Festival Holidays.

In case of Festival Holidays there are conditions like for example 30 days of work before the falling of such festival holiday is extended. Only this has to be checked to avoid payment to those not eligible and the Contractor is right in extending this paid holiday and charging the cost to the Principal employer in the invoice. Only check ensure that the contractor extending this to the eligible employees only.

All the Best, God Bless,
Doctor Siva Global HR
Tamil Nadu

From India, Chennai

Dear Keerthana,

You have stated that in connection with the work of your establishment contract labor have been engaged in different numbers on different dates depending on the requirements on daily wage basis and as per the terms of the contract the contractor has to be paid only for the actual no of days his workmen worked. The terms used in your post viz., 'firm' and 'department' do not indicate the type of the establishment in which such contract labor are engaged such as whether a factory, shop or any other establishment. This gives rise to the presumption that you do not pay for the days they do not work due to weekly off, other holidays or their own absence. In any case, I do hope that the Minimum Wages Act,1948 would be applicable to your establishment as well as the contract labor in addition to the establishment-specific labor law.

Therefore, in my opinion your question can be broken into three parts for the sake of academic purpose though it primarily revolves around only for payment of wages for ' Public Holidays ' which can be national and festival holidays or other holidays declared so by the Government on certain occasions in respect of the contract labor engaged in your establishment through a third party viz., the contractor.

The first part is pertaining to the weekly off or holiday and the wages for it. Consecutive six days of work entitles the employee for a weekly day of rest with wages under the provisions of rule 23 of the Minimum Wages ( Central ) Rules, 1950 or any other applicable State Rules framed therein. As per the proviso to this rule, if daily wages are fixed by dividing the month by 26, then no necessity to pay wages for the weekly off.

The second part is about the wages for any national or festival holiday in general. On such days, the contract labor can be either required to work on double wages or on substituted holiday on another day as per their choice OR allowed holiday with wages depending on the statutory eligibility conditions as observed by the above learned member..

Coming to the third part i.e., other public holidays during which the establishment is required to be shut down, in my opinion, there is no necessity for payment for that particular holiday as the establishment remain closed.

From India, Salem

Two learned members of the forum have been explained the subject in details. I would like to add that any payment - Weekly off ( if applicable), Festival Holidays/ paid holiday of the State/ organization where the contract persons are engaged should be paid by the contractor and to be reimbursed by the PE.

Moreover, in a year for working certain number of days/ months, the contract employees will earn some annual leave ( Factories Act / S & E Act as applicable ) which also to be paid by the contractor and to be reimbursed by the PE.

The best arrangement between contractor and PE may be reimbursement of actual cost spent for the contract employees + some service charge instead of lump-sum amount as contract fee to manage every thing without ascertaining the actual reality. No contractor will spent money from their pocket for contract employees if the same is not reimbursed by the PE.

S K Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions
+91 98310 81531

USD HR Solutions – To Strive towards excellence with effort and integrity

From India, New Delhi

Dear Keerthan Chndrsekar,

As per the CL(R&A) Act, the contractor workmen are eligible for PHs, Leave @ 1day/per 20 days working and payment @ double the rate for working on PH or @the rate fixed as per the state NH & FH rule.

This is the principle, there is nothing wrong with the invoice raised by the Contractor claiming for the Paid Holidays(PH only declared by the Principal employer).

The contractor can not claim for the Government Holidays which are not in Paid Holiday list of the establishment of principal employer.

Hope this would help you to understand the matter.

From India, Mumbai
Keerthana Chandrasekar
Dear Team, Thank you for making Clear statements and providing me necessary knowledge about this issue. very helpful for me as a New HR. Best Regards Keerthana Chandrasekar
From Germany, Georgsmarienhuette
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