Hiring Security Guards: Are We Liable for Their Wages Under the Minimum Wages Act?

If we hire security guards for our company from a guard-providing company and sign a contract at X rate, would we be liable for the payment to the guards by their parent company as per the Minimum Wages Act?

Understanding Your Role as a Principal Employer

When you hire manpower from an outside agency, your position will be that of the Principal Employer. As such, you have to ensure that contract labor engaged by the contractor at your site are paid minimum wages. If minimum wages are not paid by the contractor, being the Principal Employer, you will have to pay the difference and make it equal to the minimum wages. Certainly, you can collect the amount paid by you from the contractor.

Regards,
Madhu.T.K

Thanks a lot, Madhu. Your feedback is really helpful. But I need to show this information to our management. Can I find this information in any government policy, such as the minimum wages policy or so?

Please refer to the Minimum Wages Act, wherein an employer is defined as a person who employs workers either directly or through another person, which includes contract labor. Additionally, please refer to the Contract Labour (Regulation and Abolition) Act, in which the principal employer's liability is clearly stated [section 21(4)].

Regards,
Madhu.T.K

Clarification on Employer Responsibility Under the Minimum Wages Act

As clarified by Mr. Madhu T K, the employer/principal employer is bound to pay minimum rates of wages as notified by the appropriate government as per Section 12 of the Minimum Wages Act, 1948. The employer is defined in Section 2(e) of this Act, which shows that the principal employer is also the employer for contract workmen and thus responsible for ensuring the payment of minimum rates of wages to the contract employees.

Please also review your applicable minimum rates of wages as per the appropriate government notification, as this may also contain specific instructions for employers to ensure minimum rates of wages for contract workmen. In our case, in the state of Haryana, the minimum wages notification clearly states that where any categories of workmen are engaged or employed through a contractor, the occupier/employer will be personally responsible for ensuring the payment of minimum rates of wages by the contractor.

Regards,
R.N. KHOLA

Thank you for the information. It is quite useful and directs us on how to proceed with our immediate issue. I look forward to receiving more such useful information in the future.

Regards,
Anju