Balancing Consultant and Payroll Staff: How Should We Handle Statutory Requirements and Benefits?

Hi,

We are a network wireless engineering company. We have a total employee count of 250. Out of these, 170 employees are junior level B.Tech telecom engineers who are involved in fieldwork. Additionally, we have 60 staff who are senior engineers, team leads, project managers, and the remaining 20 are in support functions.

The concern arises from the fact that all 170 junior employees are working in a consultant mode (not on contracts). We pay them a monthly fee of X amount and deduct 10% TDS on that fee. They do not receive any facilities from the company. On the other hand, the remaining 80 employees are on the company's payroll. They receive benefits such as PF, ESI (as applicable), LWF, and other benefits provided by the company. Therefore, approximately 70% of our workforce is in consultant mode, while the rest are on the company's payroll.

In this context, we need to address the following questions:
1. What statutory requirements should we fulfill for all 170 consultant staff?
2. Is having a higher number of employees in consultant mode than on the payroll a problem?
3. Should there be a specific ratio between consultant employees and those on the payroll?
4. What benefits can we offer to the 170 consultant employees?

Please provide guidance and suggestions on the above points.

Regards,

Hi,

There is no defined ratio for on-roll to off-roll, and there is nothing wrong with hiring more employees on off-roll as most of the modern-day companies follow this practice. The contractor will take care of all statutory requirements for employees working on its payroll. For employees who are working on the company's roll, you are responsible for the following:

1. Income tax
2. TDS
3. PF
4. ESI
5. Leave allowance, etc.

I hope this information would be of help to you.

Thanks and regards,
Krishna Sati

Dear,

What I could analyze is that your 170 employees are on consolidated remuneration, so they don't enjoy benefits that other employees have. The company and employees can mutually decide whether they want to be on remuneration or salary. There is no specific ratio to maintain, as far as I know. You can provide them with medical benefits and more as per the company policy.

Regards,
Shaikh