Is a Labor Contractor Necessary for Hiring Casual Workers in Manufacturing?

Dear HR Friends,

I am new to the manufacturing industry. I have a doubt: is it compulsory to maintain a labor contractor to hire casual workers? Currently, we are directly hiring around 20-30 casual workers on a daily basis without any contractor. Please advise me on this matter.

Thanks in advance.
Venkatesh

Dear Venkatesh,

It is not necessary to have a contractor to engage casual workers.

Regards,

R.N. Khola

It is not necessary to have a contractor to engage casual workers, but it is not possible to keep a casual worker on your payroll. How will you maintain their salary? My advice is to keep them through a contractor only.

Pankaj Painuly - 9810020717

E.S.I Registration and Salary Maintenance in Manufacturing

Good morning, sir. In my manufacturing company, we have 9 permanent workers and 16 contractor workers. For the last two months, we were informed that we are not eligible for E.S.I registration. However, yesterday, Mr. Madhu told me that we are indeed applicable. The reason is that all the workers in our factory, including contractor workers, are considered our workers.

Please explain in detail how to maintain their salary and E.S.I. The contractor bill includes his workers' salary and E.S.I deduction, which he deposits and provides us with a receipt.

Regards,
[Name]

You must know that Mr. Madhu T.K. is our senior member with expertise in Labour & HR matters, and therefore, you should follow his advice. While I do not deal with matters relating to ESI & PF, it is clarified that since you are employing 10 or more employees directly or indirectly in your manufacturing unit, you are covered under the ESI Act and thus need registration and other compliances.

Regards,
R.N.Khola