Employer Liability [Thread 215428]

Dear Friends,
We have two contractors, one has PF ESIC registration and they are submitting the monthly challans to us. Another has not PF ESIC registration. Can we deposit the PF and ESI contribution of second contractor's employees on our registration number.
Please guide me. Whal I should do.
Regards
Jugal

Dear jugal,
you can deposit the pf and esi contribution of second contractor's employees in your registration number.all you have to do, is make a written agreement with the second contractor for deposting the pf and esi contribution of his employee through your code.
ultimately liability will come on you if the sub-contractor do not pay the statutory contibution.
regards
Mohan

Dear Jugal,
Mr Mohan is absolutly right, the ultimate libility comes to the pernicipal employer.

Dear Friends,
Thanks for reply. Please guide me how I would file the annual returns. i.e. alongs with our regular employees or another return for outsourced employees.
Regards
Jugal

Hi
The best way is get the second contractor registered with ESI and PF Department, and get a individual Registration Code to the Contractor and then deposit the contributions in the Contractor Code No.
If you happen to deposit the contribution of Contractor Employees, then it is as good as they are in your regular rolls.
Hence get the second contractor registered and get a individual code for him self , it is always safe, as other friends said, ultimately principle employer is liable for such deductions and payments.
Mohan Rao
Manager HR

Adding to what has already been posted....Please also note that if the contractor is deducting PF and ESIC from his employees then you as principal employeers are liable for litigation.
And i suggest you ask the contractor to get registered ASAP instead of filing the employees PF & ESIC through your number as that may be claimed as a right to on roll employment in the long run.
Seniors Please correct me if i am wrong...

Dear Friends,
Even a contractor having PF & ESI registrations also and is not paying the PF & ESI etc the responsibility lies with the principle employer. In the event of payment through you directly you can deduct that amount from his bill amount payable and pay however it is better to engage registered contractor / get the existing one registered otherwise the withdrawls etc will be on your head.
Thanks and regards - kameswarao

Dear Frinds,
The problem is that we cannot show those employees on our roll as we have some restriction of number of employees on our roll. The contractor is not ready to take the registration in this year. Beacuse the total strenth of that contractor is less than 10. In this case what we should do ?
Regards
Jugal

It seems to me that
1. Whether the ESI/ PF contributions are paid in the contractor's or the principal employer's code, the ultimate responsibility is always with the principle employer.
2. As long as there is a genuine contract between the principal employer and the contractor (and atleast principal employer registered under Contract ...Act, wages are paid by contractor etc.), labour enforcement authorities should not mind contributions of contractor's labour submitted in principal employer's code.
3. As employer you might have every right to demand the contractor to obtain registration. Of course, I have heard that at times the authorities are not be keen to register a contractor unless he/ she has more than the minimum requisite number of workmen engaged under him (because they might want to keep the onus deliberately on principal employer for justifiable reasons). Therefore what this means is that you might have to work with larger contractors, if available, who are having a sizable number of workmen and therefore, have their own codes.

Though for a young manager like me, contract labour and related matters still seem to have many areas of greyness, above is what I feel. As always, there can be no substitute for a considered labour law consultant's views, or better still, go for word from the horse's (enforcement authority's) mouth if possible.

best wishes

Mr. Jugal,
As far as possible you should insist the contractor to obtain their own code nos. of rPF & ESIC.
If you deposit the contributions on your code, better you should keep seperate challans and records, which is possible in case of ESIC. However, keeping seperately PF records is difficult. The turn over in Contractor"s workmen would be high and these workmen's PF number would come in between of your regular employees. Settlement of P>F dues would also be your responsibility and if contract workmen comes for settlement after 2 to 3 years who would identify them if the contractor is no more with you, with whom they had worked on your premises. Administratively you may find difficulties in long run. Therefore coverning contract workmen under Co.'s code no. you will have to take a very concious decision.
M.A.KULKARNI