Are Contract Employees Really Receiving the Same Care and Benefits as On-Roll Staff?

Dear HRs,

I hope everyone is having a great day! I just want to know the feedback/suggestions on the captioned subject.

Understanding Agreements Between Principal Employers and Contract Agencies

As per my understanding, most agreements between a principal employer and a contract agency stipulate that if the principal employer is paying some X amount (which includes employers' and employees' contributions towards PF and ESIC) as wages, the same should be paid to the employee except for the service charges. But how many of us (HRs) are looking at this and helping contract employees to get their salaries as actuals?

Ensuring Timely Salaries and Benefits for Contract Employees

Apart from the above point, I just want to know how many of the HRs are ensuring that contract employees are getting their salaries on time and are benefiting from PF, ESIC, and other statutory benefits.

I have seen most HRs checking the bills, signing off, and sending them to accounts for payment. Kindly give your inputs on the above points so that I can try to understand how well or how deeply we are taking care of our contract employees, just as we do with our on-roll employees.

Thanks and regards,

Harish Kumar
HR

The Role of HR in Contract Labour Engagement

HR as a function is not the final authority in any organization. It is not due to ignorance of the law (Contract Labour Act) by HR that they permit the engagement of contract labour without following the law; rather, they are forced to follow what the top management wants to enforce. I don't think that even HR professionals in large, multicore companies in India, who engage contract labour in areas where such engagement is totally prohibited, are ignorant of the provisions of the law. They are following or implementing the management's policy of easy hiring or doing things in a "better way" rather than unnecessarily wasting time negotiating with trade unions and so on. This is not restricted to manufacturing but is also seen in IT, hospitality, and other service industries.

Once the engagement itself is illegal, why should we delve deeply into whether these contract labourers are paid minimum wages or whether ESI/PF contributions in respect of them are paid on time? Here also, HR will remain silent. Their duty will be confined to verifying whether the ESI/PF remittance challans, statement of wages paid, etc., are attached to the contractor's bill or not.

Therefore, what is required is to empower the management and regulate the engagement of contract labour in the way it should be. This is not possible unless the management, which comprises the Finance and Marketing team in the majority and HR as the minority, changes its attitude. Unless HR is given an entity separate from all, with adequate powers to implement laws, they cannot do anything. In many companies, HR is being underutilized. In such a scenario, HR will function like a machine only. It is not the fault of HR but the fault of our system.

Regards,
Madhu.T.K