Who Handles PF and ESI for Contract Staff Earning Rs. 4,000 Monthly? Seeking Clarity on Liabilities

Dear All,

I need your assistance with this query. We are using a consultancy service that has sourced a few candidates for us on a contract staffing basis (not as part of our company's roles). Can you please let me know who is responsible for paying ESI and PF for these candidates and how much? I have learned from the employees that they are paid only Rs. 4,000 a month, whereas we pay the consultancy Rs. 7,000 a month.

Please inform me of the liabilities regarding payments such as PF, ESI, PT, TDS, etc.

Is PF mandatory for a salary of Rs. 4,000 per month? What other payments or benefits are these employees, our company, and the consultancy responsible for? Does PT, TDS, or any other elements come into play?

Your responses would be greatly appreciated. Kindly assist.

Look, as per my knowledge, PF and ESIC are paid by employees as well as employers. Now, as you are the principal employer, you have to pay the consultancy the PF and ESIC contributions and the service charge as per the agreement. The same amount will be deposited by the consultancy to the respective employees' PF and ESIC accounts. I am attaching a file for your reference. I hope it will clear your doubts regarding the same.

Now, for any doubts regarding the deposit of PF and ESIC amounts, you can ask for photocopies of the returns submitted against PF, ESIC, P-Tax, and service tax for your future reference. Also, at the end of the financial year, you can ask for Form 3A and 6A for PF.

Regards, Satyabrata Sarkar

:icon1: +91-9740833897

You are the principal employer, so the liability of PF and ESIC naturally and legally falls on the company's side. And of course, I assume you are making the payments by cheque or through a legal process to the consultancy. This is sufficient to prove that those employees are working at your company's premises.

Hi,

As a principal employer, it's your liability and responsibility to verify that the consultancy, on whose payroll the employees are, is paying all statutory dues on time. Every month when they bill you, ask them to submit the challan copies of PF and ESIC of the previous month, as well as the returns as and when they are due and submitted, highlighting the names of employees working on your premises. If the consultancy is not paying the dues, it will become your responsibility to pay, so keep a check on that. Ensure this for all contractors you have, as maintaining proper records will put you on a safer side in case of any inspection. Create a separate file for each contractor with detailed paperwork.

Regards, Harshad

Hello,

Thank you for your advice. The details you have shared with me are very helpful. The attachment has also cleared a lot of my doubts. Thanks again for your time and assistance.

Best Regards,
Ravi Shah

Hello All,

Thank you for your advice. The details you have shared with me are very helpful. The attachment has also cleared a lot of my doubts. Thanks again for your time and assistance.

Best Regards,
Ravi Shah