Appointment Letters for Contract Employees: Are They Really Necessary?

Hi All,

Can anyone give me some details about the appointment letter for contract employees? Is it necessary to provide a letter or not? Kindly advise me on this and other related information.

Regards,
Ramakrishna

Dear Ramakrishna,

A contract employee is an individual recruited by an external party and hired by your company. When an employee is recruited by an agency or an external party, that agency or party issues an appointment letter to the employee. Since the employee is not on your company's payroll or employed by your company, you cannot issue them an appointment letter. Additionally, the ESIC and PF amounts are shown or submitted by the agency or party to the respective ESIC and PF Inspector's office.

It is possible that your company may pay the salary to the contract employees, or it can be done by the agency or external party. I am also attaching a copy of the Contract Labour Act which might be helpful for you.

Regards,
Ankit
09869851356

Hi Ankit,

Thank you for the information. I want to know if we want to hire an employee as a contract employee directly, what are the rules and advice, please?

Regards,
Ramakrishna

A contract employee is an individual recruited by an external party and hired by a company. When an employee is recruited by an agency or an external party, that agency or party issues an appointment letter to the employee. Since the employee is not on your company's payroll or employed by your company, you cannot issue them an appointment letter. Additionally, the ESIC and PF amounts are shown or submitted by the agency or party to the respective ESIC and PF Inspector.

It may happen that the company pays the wages to the contract employees, or it may be done through the agency or external party.

Regards,
Venkatesan

Hi Ramakrishna, if you are hiring a contract employee directly to your company, the company should issue an appointment letter. Additionally, you should deduct PF and PT for them.

Thanks,
Vimala