Managing Contract Labor Attendance with Biometric Systems: Legal Compliance and Best Practices

We have contract laborers in our organization. Can we register their thumb impressions to record their attendance? What I heard is that under the Contract Labor Act, the principal employer cannot keep attendance records of contract labor.

Dear Friend,

It's not about "can not keep" attendance register; rather, it's the duty of the contractor to maintain the muster roll for his workmen.

In practice, you must maintain the attendance register with you so that you can eradicate the chances of any ambiguity creeping in attendance matters and subsequently affecting the billing matters.

You can keep it manually or can even systematize the same, but ensure that your contractors maintain the muster roll for its workmen deployed at your organization, and periodically you collect the document from the contractor.

Hi,

I agree with what Arnab Dasgupta said. It is to reduce the chances of errors that your contractor might make. You can verify the muster roll maintained by him with your attendance register - manually or via software. This would cross-verify the attendance entries and avoid incorrect billing.

Regards,
Hiral

Dear Swapnil,

As a matter of fact, if the contractor is not maintaining the attendance register, it is the principal employer who has to maintain the Muster roll, Payment Register, and OT Register of all the workers engaged in an organization. So, you can implement the Biometric attendance system in your organization, even for the contract workers. This way, you can directly download the Muster roll, Payment Register, and OT Register from the system. Additionally, you can make the bill payment for the contractor based on the records available.

Dear Swapnil et al,

The notion that the Principal Employer shall not keep attendance of the contract labour is too naive a view, even from the perspective of the Contract Labour Act. By keeping attendance of the contract labourers, a contract with a contractor will not be rendered sham; the key tests are many others. The requirement under the Factories Act is that the factories keep a record of all those who work there. So, if you are keeping a biometric record of all present in the factory, it will help you ensure compliance under various acts like PF, ESI, etc.

KK

Dear All,

Thanks for the guidance. However, we have some employees on a contract basis where the contractor is submitting a bill every month. Our directors want to track their attendance using a biometric machine. I have heard from other HR peers that we should not keep their attendance records on the biometric system. I checked the Contract Labour Act, and it states:

In respect of establishments not covered under sub-rule (1), the following provisions shall apply, namely:

(a) Every contractor shall maintain a register of muster roll cum wage register as prescribed by sub-rule (1) of rule 27 of Maharashtra Minimum Wages Rules, 1963.

(b) Every contractor shall issue wage slips as prescribed by sub-rule (2) of rule 27 of Maharashtra Minimum Wages Rules, 1963.

(c) The signature or thumb impression of every worker on the register of wages or wages-cum-muster roll, as the case may be, shall be obtained. The entries therein shall be authenticated by the initials of the contractor or his representative and duly certified by the authorized representative of the principal employer as required by rule 54.

Kindly guide me on the same.

Dear Swapnil,

Referring to my previous post in response to yours, I emphasize that it is the primary responsibility of the contractor to maintain the muster roll of his workmen, which is also a statutory compliance norm under CLRA, 1970.

Now, as the principal employer, the law does not stop you from tracking the attendance of the workmen deployed by your contractor, and you may even mechanize the process.

As desired by your directors, you may certainly opt for a biometric system as the attendance tracker, which will also serve as a security check at your premises.

I can share my experience with you that we, as a contractor, had deployed manpower with a global IT company, and the attendance of our employees is tracked via biometric access cards at the premises of our client.

The muster roll format will show you whether any workman was present on his/her duty on a specific date, and it will not include the in and out times that you can track from the biometric system. This will help you monitor whether the working hours are properly utilized or not.

The only point you need to ensure is that your contractor maintains the muster roll for the attendance of the workmen as a statutory compliance norm.

Dear Mr. Swapnil,

You can maintain the attendance of your contractor's employees in the same attendance biometric readers that you use for your regular employees. The service provider can make modifications accordingly so that you can generate reports separately for regular and contract employees without any mix-up. As a principal employer, you have every right to monitor the books and records of your contractor. In fact, you can allot an exclusive workplace for your contractor(s) by providing table space, a computer, etc., and may even charge a notional rent. However, do not explicitly involve yourself in their hiring, firing, leave, reward, or punishment-related matters. Please ensure you receive their monthly compliance report along with photocopies of PF, ESI, paid challans, etc.

It is safe for the principal employer not to maintain the attendance of contract employees. It will provide evidence of the master-servant relationship between the employee and principal employer. However, he can adopt some discreet methods of attendance recording to cross-check contractors' bills. The contractor or his employees should not have access to it.

Varghese Mathew
09961266966

Dear Swapnil,

Computerized records can be maintained for statutes under labor laws, but they have to be approved through labor offices. You can contact your nearest labor office to know the procedure for it.

Thanks,
Bijay

Dear All,

The question is about implementing a biometric recorder for CL. It is suggested that as a principal employer, you can implement this system for security reasons as it is your right to monitor the movement of persons on your premises. The data generated can be used to verify "on work" attendance of the laborers. However, you should not project it as a "muster roll" as you do not have any employer-employee relationship with the contract laborers. Strictly monitor that the contractor maintains muster roll as prescribed in the Act/Rule for performance of compliance and payment as the daily wage payment has to be in accordance with his attendance records.

Attendance Records for Contract Employees

The initial question is whether the principal employer can keep the attendance record of the contract employees. The tracking, capturing, and maintaining of the attendance record have been discussed. What about the main question?

Regards,
Bijay