"M/s A" is the License Holder under Contract Labour Act, and also PF and ESI Code, Gate Pass is in the name of "M/s A".

"M/s A" has engaged Workmen thru Sub Agency "M/s B" for construction activity.

.... But Wage Payment of the Workmen has been disburse by the "M/s B"
.... And PF & ESI have been deposited under "M/s A" establishment Code.

My question is that, Can "M/s B" pay wage to the workmen?
Will Principal Employer accept it?

From India, undefined
Freelancer In Hr &indirect Taxes For
Ceo-usd Hr Solutions
Labour Laws & Ir


Here it is three party - PE, Contractor & Sub-contractor. Usually who pays the salary/wages - they are also responsible for PF, ESIC etc. compliance.

Here the arrangement is not proper. In case of any audit it will appear that the employees are under pay roll of Sub contractor but compliance is done under code of Contractor. It is almost like contractor is failed to comply as such PE is complying in their code. As per CLRA Act Contractor includes sub-contractor.

So far as PE is concerned to them there is no existence of sub-contractor as all compliance is done by contractor.

The entire above arrangements are confusing and in case of detailed enquiry the PE and statutory body may raise objection regarding present arrangement. For all practical purpose the presence of Sub-contractor will raise one big question and all employees will be considered as contractor's employees.

My organization USD HR Solutions is a sub-contractor to Tata Steel where the Contractor is Vesuvius India Ltd.(MNC). We engage people and pay salary as well as comply for all statutory need - PF, ESIC, Bonus & Gratuity. We have been allotted one Vendor code by Tata Steel. We have no commercial agreement with Tata Steel but we have the same with Vesuvius India Ltd. in details. To my opinion this is the right arrangement.

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 Santosh, It is totally wrong, Employer will not allow and accept such type of activity.


Principal employer issues the form V to contractor and contractor is sole responsible for compliances.
From India, Vadodara

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