Who Pays Minimum Wages for Contract Workers: Principal Employer or Third Party?

Dear Friends,

Please advise whether the Principal Employer is responsible for the payment of minimum wages to workers not employed directly by him but providing various services under a service agreement with a third party, such as housekeeping, loading, unloading, and packing.

Additionally, could you provide information on the minimum wages paid to a Sweeper and the classification under which his services would fall?

Is there any distinction between employing a worker through a contractor versus employment through a service agreement that does not specify the number of workers but only outlines services provided in exchange for fixed service charges?

Regards,

Sanjiv Sharma

The principal employer is responsible for ensuring payment of minimum wages to the employees placed to work with him by a contractor. If the contractor fails to pay wages, then it becomes the responsibility of the principal employer to pay it, and of course, he can deduct the amount so paid by him from the service amount payable to the contractor. The minimum wage is a state subject, and therefore, please refer to the rates applicable to your area.

Regards,

Madhu.T.K

If the company is under liquidation process and the liquidator has engaged contract workers, will the revision in minimum wage rates be applicable to the said company?