Is It Mandatory for Employers to Pay PF for Contractual Staff with Small Contractors?

I would like to inquire whether, as a principal employer, it is mandatory to pay PF contributions for contractual staff even if the contractor is not covered under the PF Act (with less than 20 employees on the contractor's payroll).

Regards,
Ashish C

Since your company (principal employer) is covered by PF, any person engaged by a contractor who is otherwise qualified to become a member of EPF by way of salary is to be covered by EPF, even if the contractor does not hold a separate PF registration. In such a scenario, the contract labor will be registered under the principal employer's registration only. The same thing applies to ESI as well.

Regards,
Madhu.T.K

Yes, the Principal Employer (PE) has to take care of the ESI/EPF of the contractual employees in that case. The contractor shall be using the PE's registration code.

You have to pay PF/ESI for contractual employees if your organization/firm falls under this category.

Regards,
Meenu