Hiring Seniors on Contract: What Are the Legal Liabilities and Best Practices?

Hi, I am working in a manufacturing company. My company wants to engage some individuals who have completed 58 years of age. So, my question is, if we engage them on a contract basis with a fixed tenure and a consolidated salary, will there be any PF and other liabilities involved? Please advise on the best solution for this type of recruitment.

Regards,
mantu71

Hi Mantu,

There are compliances that your company would need to adhere to. The other best option would be to keep him/her on third-party payroll. In this way, you can avoid all the hassles of maintaining his files, returns, etc. Should you need more help, do contact me.

Regards,
Imran

Dear Mantu,

I don't understand for which post you want to employ. There is a salary limit for PF. If you are paying more than that salary, you can treat them as an exempted employee. You can also appoint them as a Consultant. In that case, these people will be Individual Contractors, and you have to deduct TDS only.

Durgadas

Dear,

If you hire him as a consultant, there is no need to pay PF. Otherwise, if you hire him as an employee, PF will be paid to him.

Thanks,
J. S. Malik

Dear,

You can enter into an Independent Contractor Agreement by deducting TDS. The test is that you cannot have any control over how he works, but you can only see his output. If you retain control, then the Authorities may construe him as an employee. Please take specialist localised legal advice.

With Regards
V. Sounder Rajan
E-mail: rajanassociates@eth.net

Why don't you take them as "Consultants" on a yearly basis and keep the consultancy agreement renewed every year.

Regards,
RJ Nair
Management Consultant
Bangalore
988 65 23 182

Hi, I am working in a manufacturing company. My company wants to engage some individuals who have completed 58 years of age. So, my question is, if we engage them on a contract basis with a fixed tenure and a consolidated salary, would there be any PF or other liabilities to consider? Please advise on the best solution for this type of recruitment. Regards, mantu71

On a contract basis and with a fixed term, there is no requirement to pay PF. Regards, VC Prakash