Are We Liable for ESI/PF Payments for a Contractor with Less Than 10 Employees? Seeking Advice on Penalties and Online Payment Options

Dear Sir,

Our company assumed that ESI contributions were being paid by the security contractor for his guards. However, when we requested the challans, he informed us that he had not paid any ESI or PF contributions as his company has fewer than 10 guards. Is ESI/PF applicable if the contractor's employees are fewer than 10 in total? We have 40 of our own workers for production activities, and the guards for security, employed through the contractor, amount to 3.

As the principal employer, we are willing to pay if required to avoid any legal complications. Please advise if we can pay the ESI contributions for the past two years on our behalf, and if so, what are the late payment fees, penalties, or interest charges involved? Can we make the payment online, and if yes, under which category should we deposit this amount since the security agency does not have its own ESI number?

Best regards,
SHD

Dear,

Yes, ESIC/PF will be applicable to the contractor's employees because your company is covered under the provisions of ESI and Provident Fund. It is the responsibility of the principal employer to ensure the payment of ESI and Provident Fund through the contract of the principal employer themselves.

You are advised to immediately pay the contributions for ESI and Provident Fund. Later, or at the time of inspection, the department may request the payment of damages and interest for late contributions.

Please ensure compliance with the regulations to avoid any penalties.

Thank you.

Hi,

My name is Rohit Sharma. I have four years of experience in customer support. I am pursuing my MBA in HR and Finance, currently in the 4th semester. However, I am now looking to transition into the HR field. Please let me know if you have any requirements for HR fresher positions in Chandigarh or the nearby area. I am hopeful for a positive outcome.

Regards,
Rohit Sharma

You should pay ESIC and PF contributions for the contractor because during inspections, you will be liable for the payments and any damages. Otherwise, your company may be blacklisted, and a 7A case could be filed against you.