If Any Contractor Taking Some Amount Back From The Security Guard After Transferring To His Account What Action We Should Be Taken Against The Contractor By As A Principal Employer"
From India, New Delhi
Labour Law & Hr Consultant
Partner - Risk Management
Management Consultancy


Dear Rajdeep,

I think that your question needs little more elaboration.
First and foremost, whether you received any complaint from anyone like the concerned security guard or someone else on his behalf?
Whether the particular bank account is exclusively maintained by the contractor for the transactions with your company or his common current account in which all his business transactions are pooled together?
Whether the contractor rotates his security guards among various principal employers?
What was the amount initially transferred to the credit of the security guard - his salary,bonus or any arrears?
Whether the amount transferred back was towards recovery of any over payment wrongly made before or any advance?
Whether any wage hike was given by you to the contract labor recently through the contractor and the amount transferred is exactly equal to the hike?

From India, Salem

This unhealthy practice is prevalent in many places, on the one hand outwardly the statutory compliance is ensured, on the other hand the contractor is drawing an undue advantage.
Once this has come to your knowledge, it is nessary to call the contractor and ensure that the workman receives back the amount returned by him. Further, make it a regular practice to check with some of the contract labourers on the amount and the timeliness of the wages they receive. In a very casual manner I used to check with 5-10 contract labourers in different work areas on almost every day I visit the shop floor and used to take follow up action. This step produced very good results.

From India, Mumbai

The Payment of Wages Act very clearly states that if there is any case where an employee pays any amount to the employer after receiving salary, it will amount to deduction.

There is a list of deduction and any deduction other than that is illegal.

In most cases, the above would be happening if the contractor is paying less than minimum wages by recovering some of the wages paid at minimum wages to pass scrutiny from audit.

You need to warn the contractor and ensure he pays the money back.
However, in the longer term, you need to replace him with a contractor that is compliant with the laws so you do not get in trouble at any stage.

From India, Mumbai
we have served the notice to the contractor to furnish clarification and on other hand discussed with our competent authority not to renew their contract further. As security guard has no proof to pay back to them in cash.
From India, New Delhi

I signed statement from the concerned security guards is adequate proof.
It depends on what your company wants, but you can always take the guards affected by this to the labour commissioner and help them file a complaint.

And you should immediately terminate the contract if the contractor can't give an explanation in a weeks's time

From India, Mumbai
Dear Umakanthan M, Additional Commissioner of Labour (RTD),
1. We have received the complaint of the security guard through the labor commissioner for redressal under intimation to them, we have never received any such complaint directly.
2. The contractor has provided a current Bank account in which their payment of invoice has been transferred by us but it is not sure whether this account has been used for other transactions.
3. No, they deployed fixed security staff at that site and we don't allow him to change the staff without informing us.
4. S/G was paid Rs. 18431 for 24 mandays and there was no recovery agaisat S/G.
5. No. The agency was alleged by the S/G that after transferring the full wages as per existing MW, they take some amount back in cash.

however, we have served the notice to the contractor to furnish clarification and on other hand discussed with our competent authority not to renew their contract further. As security guard has no proof to pay back to them in cash.

Please suggest what appropriate action we, being a Government deptt. and as a principal employer, should take against the agency when we don't have any documentary evidence in such cases if occurs in future.


From India, New Delhi

I think you can go and meet the labour commissioner in your official capacity and ask him to expedite the investigation and close the matter either way. If he gives the contractor a clean chit, then you can continue to employ him, if not, you need to replace him.
From India, Mumbai

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