Temporary Factory Work: Do We Need to Deduct Provident Fund and ESI? Seeking Guidance

Dear seniors,

Very often, jobs of a temporary nature are being carried out within the premises of the factory, for example, painting and the demolition or erection of retaining walls. These activities, when not directly or indirectly connected to production, raise the question of whether we need to deduct any amount towards provident fund and ESI.

Regarding the above query, the response received through RTI from the Goa PF Office is, "Under the RTI Act, only available information can be provided, but not explanations on how and why in respect of hypothetical situations."

I would like to request your assistance in providing proper guidance in this regard.

Thank you,
lkambli

Inspection and Compliance with ESIC and PF

During the inspections under ESIC, the inspector usually identifies these types of payments and imposes the demand for ESI deposit. The reason behind this is that even casual laborers should be covered under the insurance provided by ESIC. Similarly, the same applies to PF. When work is done through a contractor's labor and payments are made to the contractor, it is important to ensure that the contractor holds a license under the Contractor Labor Act, deducts PF and ESI from the labor wages payment, and deposits the amount along with their own contribution.

Therefore, it doesn't matter whether the workers are there temporarily or on contract; they fall within the purview of the law and are governed accordingly.

Thank you, sir, I have attached the reply received through RTI from the provident fund official. The answer to the query was not clear from the department, as you mentioned. The department cannot provide a clear-cut answer. May I request a reference in support?

Regarding ESI

I agree with you because it takes care of the employee through insurance. My next query is about engaging a person, a hamali, for loading some material. He is not a regular employee and is not registered under the ESI. If he meets with an accident while performing the given job and causes injury, what benefits will the hamali be entitled to?

Kindly assist me in obtaining some valuable information on this.

Regards,
L. Kambli

Mr. Kambli, The benefits, e.g., insurance and treatment, may be provided if the ESI contributions have been paid on such wages, and the event shall also take place within the wage period. The employer should take cognizance of this fact and file an application in ESIC for the worker for whom the ESI has been paid.