Outsourced vs. Permanent Employees: Is It Fair to Offer Different Benefits?

Hi,

I am working in a government organization, and we have some outsourced positions. Currently, we advertise the outsourced positions openly, and based on merit, we recruit candidates. However, outsourced employees receive lower compensation compared to regular employees and do not have access to benefits that regular employees enjoy, such as medical insurance and compassionate appointments.

Is this legally correct?

Thanks & Regards,
Srimadhavi

The relationship that you have with the outsourced employees is not that of an employer and employee. For the employees engaged through a contractor, the contractor is the employer and he is supposed 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 that makes it obligatory on the part of any employer (not being government) to give employment to the next of kin of those employees who die while in service (compassionate employment). As the contractor is governed by labor laws meant for these private establishments, he has no such obligation by law.

Regards,

Madhu.T.K