How Do You Ensure Fair Treatment and Benefits for Short-Term Contract Laborers?

What are the best practices in contract-labour management? I work in a utility where large numbers of contract laborers are engaged. We take care of minimum wages, PF, ESI, etc. However, the contractor does not always pay the laborers the full minimum wages. Also, it is not possible to cover all contract labor for PF & ESI. For example, a contractor normally has work for 50 contract laborers throughout the year, while he has work for additional laborers, let's say 10, for 2 or 3 months in the year. In such cases, he does not take PF or ESI cover for these laborers.

The issue is, what is the best practice for these additional laborers? Is it workmen's compensation insurance? Or personal accident insurance? What are the other issues here?

R. Hari

Hi,

The best practice insofar as the employment of contract labor is concerned is to ensure that the provisions of the Contract Labor Regulation and Abolition Act and all other relevant laws applicable to contract labor are implemented.

If the contractor violates the provisions of the Minimum Wages Act, Employees Provident Fund Act, ESIC, or Workmen's Compensation Act, you, as the principal employer, will be held responsible and liable.

You are required to witness the payment of wages to the contractor's workers. Make sure that you check the payment sheet off and on and fix responsibility on the contractor. Even if the contractor's worker is employed for a day and meets with an accident, the contractor is liable to meet the statutory obligation.

It is advisable that while issuing Notifications inviting tenders (NIT) for the engagement of a contractor, you clearly specify that he will have to comply with all statutory obligations. Ask the contractor to mention the EPF code. Make sure that you only deal with the contractor and do not supervise the work of contract labor. Do not release the earnest money deposited with you until he gives a certificate that he has cleared all the dues of the workers engaged by him.

Cyril