ESI And PF For Contractor

Hi
I want to know if a contarctor has not submitted any ESI and PF for the workers working in plant,then to what extent the company can hold its payment.

It is one of the primary responsibilities of the Principal employer to ensure that the contractor is remitting the PF/ESI contributions in respect of the employees engaged through him. If the contractor fails to make payment aforesaid, the principal employer has to make payment on behalf of the contractor and deduct the amount so paid (how huge the figure be) from the payment due by him to the contractor.
Regards,
Madhu.T.K

Thanks Sir
But i want to know one more thing that contarct is made for completing the task in a given time frame.so how much to submit to the goverement and if it has not been sumbitted since many months then how much penaly can government can charge from the company.

Dear Mr. Madhu,
That was very informational. My query is, if we take MBA graduates (pursuing/freshers) to work with our company as Interns say for 6 months, do we have to deduct/pay EPF for them?

Hi,
I agreed with Mr. Madhu. One should always ask for ESI & PF return every month.
regards,
sanjay

It is mandatory to cover contract worker under ESI and PF and deposit the same eevery month with in stipulated time provided under the PF and ESI Act.Otherwise pricipal employer is responsible for non deposetion of the contribution. The concerned authority may sue principal employer.
Ravindra Watve

Dear Mr.Mathu,
One of our contractor has been with us since April'08 without ESIC code. Now he has applied for code number in Jan’09.

Following is the status of the contractor.

1. April’08 to September’08 contribution yet to be remitted to department,
2. Oct’08 to Nov’08 contribution remitted to department before applying code number,
3. Jan’09 he has applied for code number and paid some part of amount.

Please advice me how to remit April to September contribution, and

Also I need to know adjustment of remitted amount before applying code number.

Regards
Arunachalam.R Devar

Dear Devar,
I think here for the time being, the ESI & PF amount can be remitted on company's establishment code.The amount for the period Apr.08 to Sep.08 is Half yearly return period. However, remitt the amount as stated and recover from the contractor. As soon as the contractor will get the PF & ESI code then from Oct.08 to till date the amount can be remitted to under his codes.
Sameer Deshmukh

Dear All,
Being a Contractor, what are the diffrent complainces to be adhered for installation,commissioining on various sites.
SameerDeshukh

Dear Supriya,
The Principal employer should foresee the interest and penalty/ damages payable by the contractor and to that extend withhold the amounts payable to him. Usually, in all such contracts, there will be a retention clause by which the employer can retain a portion of contract amount for six months. This is usually done to recover any loss or lapse identified in the working of the plant installed or work done or products manufactured by the contractor. While calculating the damages, a higher value shall be taken so that we should be safe.

Dear sarajesintha,

The MBA interns should be undergoing their internship as part of the curriculum of the University and their name should not appear in the Muster rolls. Otherwise, they may be treated as trainees other than trade apprentices engaged as per Apprentice Act, 1961. Only those trainees pursuing for National Trade Apprenticeship Test and who are engaged through RI centre/ ITI following the Apprentice Act are exempted from ESI and EPF. However, for EPF a variant verdict by the Apex Court of India has come in the case of Campco, Manglore, that all trainees shall be exempted from coverage of EPF. Therefore, before engaging interns, letter from the authorised person of the University or the College shall be obtained. The intership shall be for a specified period under the guidance of the HR department of the company and there shall be regular assessment of the candidate's effective utilisation of the OJT(on the job training).

Dear Arunachalam,

Contribution for the period from April to September will be your responsibility. You have to pay it with interest and damages as applicable. Since the contractor is still with you, you do not have problem, you can deduct the amount paid by you from the amount payable to the contractor.
Adjustment of amount pertaining to the period before allotment of ESI Code is their look out. He can file returns retrospectively so that his employees will get benefit following the contribution period from April.

Regards,

Madhu.T.K