Contract Employee Vs Permanent Employee

Hi
I am working in a Govt organisation and we have some outsourced positions. At present we give an open ad to the outsourced positions and based on the merit we are recruiting the candidate.
But the outsourced employee is getting less than in comparison to a regular employee and also will not have benifits that are for regular employees. Ex: Medical insurance, compassionate appointment etc
Is it legally correct?
Thanks & Regards
Srimadhavi

The relationship that you have with the outsourced employees is not that of employer and employee. For the employees engaged through a contractor, the contractor is the employer and he is suppose to comply with all statutory measures like medical insurance (ESI), Provident Fund,maternity benefits, payment of minimum wages, Gratuity etc.
As far as the contractor is concerned, he is expected to ensure only payment of minimum wages fixed by the government and there is nothing wrong if the salary is far lower than the salary of regular employees of the company where they are working. There seems to be no law which makes it obligatory on the part of any employer (not being government) to give employment to the next kin of those employee who dies while on service (compassionate employment) and as the contractor is governed by labour laws meant these private establishments, he has no such obligation by law.
Regards,
Madhu.T.K