Dear Sir, Our company has been depositing the PF and ESIC contributions of the contractor's workmen under the company Code. Can you please advise whether it has any legal ramifications in future?

Hilary Joseph

From India, Jaipur
Hr Manager
Advocate Prem Chanda Yadav
Silvassa. Www.lawglobalhr.com
Management Consultancy

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Advocate Prem Chanda Yadav

You depositing in company code. menace your are completing all compliance and need to comply in future if any grievances going to raise.
From India, Mumbai
Sir, The company has been following this practice right from inception and have joined only in Sep 2022 and found this as alarming.
From India, Jaipur

You are adopting wrong practice, which may have far reaching consequences for your company. It is not a matter that company makes contribution, If your company wants to make contributions, it can (as a gesture towards contract workmen of your company) But, you should have directed your contractor to obtain a code for himself and contributions should have been remitted through his Code number, and not of Company"s.

Now if some anomaly occurs on PF and/or ESI fronts in future, your company will have to face the music.

From India, Aizawl

The basic question in all such matters is, whether the contract arrangement is genuine or not. Where the contractor has obtained license, PF & ESI registration, recruited the labour, supervises them and pays them the arrangement would appear genuine. The ultimate question is whose labour it is, the contractor's or of the PE?
So payment of PF & ESI contribution directly by the PE goes against the above principles though it is not decisive.

From India, Mumbai

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