What Happens If a Contractor Skips PF Contributions? Understanding Employer Liability

https://www.citehr.com/353434-new-pf-wages-2.html

Dear friends, please enlighten me if there is any liability/responsibility of the Principal Employer under the EPF & MP Act in the following situations:

1. A contractor engaged in the P.E.'s Factory/Mines premises has obtained a separate PF Code for his contract establishment and fails to deposit PF contributions (both employees' & employer's) for certain months and thereafter absconds from the work site.

2. A contractor having fewer than 20 employees does not cover its employees under the EPF & MP Act by obtaining a separate PF Code.

With regards,
S.K. Hota

Responsibility of Statutory Payment by the Principal Employer

The responsibility of statutory payment by the principal employer arises if anyone has not contributed. In such cases, the principal employer will pay the contribution and can deduct it from the respective contractor's bills.

Regards,
P. Xavier Raj

Kindly help if there is any liability or responsibility for statutory compliance in the case of a subcontractor (working under us) employed by us, the contractor. Our clients have been requesting PF details of our subcontractor as well.

Additionally, I would like to understand what a Provident Fund Recovery statement is. Kindly assist me in clarifying the above.

Thank you in advance.

Regards,

I have already informed you that the principal employer is responsible for all statutory payments. If there are any outstanding or unpaid payments during an inspection, the statutory authorities will recover the dues from the Principal Employer.

I understand your second question.

Regards,
P. Xavier Raj

Thank you for your reply. My second question is related to the PF recovery statement. One of our clients has asked us to fill in an annexure (attached). We have been providing all statutory details to our clients on a regular monthly basis. However, they have requested details to be provided in this specific format as well.

Kindly let me know about this annexure as well.

Thank you in advance.

Regards

I think your client is required to have the consolidated PF contribution statement for contractors. I don't know whether you have remitted it or not. If you have the details, you may discuss it with your management and forward.

Regards,
P. Xavier Raj

We do maintain a PF register that captures all the data mentioned in the annexure and have been providing the same on a monthly basis to the client. Although we are providing the PF register and challans on a monthly basis, they have asked us to provide and fill up another annexure.