Do We Need to Deduct ESI and PF for Daily Laborers Hired for Short-Term Tasks?

Need for ESI and PF Deductions for Daily Laborers

Please help me. Do we need to deduct ESI and PF if 10 laborers are hired for a day to remove the waste or debris of a building? The wages are calculated as daily wages.

Regards

The mere engagement of contract labor and engagement for only one day does not exempt the liability of employers towards the PF and ESI Act. It is recommended to comply with the ESI Act, especially if the nature of work is prone to accidents.

Regards

I will go with Kuljit. PF will be applicable for permanent employees and not for daily wage employees. However, I think ESI will also not apply. In case of an accident, a certain fixed amount should be given (this should be specified in the company policy). The reason why both are not applied for them is that different people will be coming in every day. Therefore, you cannot provide these benefits to those who are only there for one day. I hope you understand.

Kuljit is correct because in both the Employee Provident Fund and Miscellaneous Act and the ESI Act, they do not mention a time period in the definition of either employee or employment. Instead, they explain the nature of services (type), place of services, and control between the employee and employer.

If we interpret those provisions, then mere engagement for one day does not avoid the liability of the employer to deduct PF and ESI. However, those acts should be applicable to that factory, establishment, or shop, and in addition to that, the pay to the employee should not exceed Rs 6500 per month.

Obviously, you will have to deduct the PF and ESI for those engaged in debris removal. However, if you mention that the expenditure incurred for the removal of debris will not attract any PF or ESI, instead of wages disbursed to the workmen engaged in debris removal, you will have to deduct and deposit the PF & ESI. In that case, you do not need to pay.

The expenditure will remain the same, but you must obtain individual voucher signatures from the workmen engaged in debris removal and keep them separately for future reference.