Request to read the following post and guide on probable solutions. The post is a bit long as I have tried to cover all the aspects.
1. My Company (a PSU, manufacturing industry) outsourced the transport service since July’13. As per the terms and conditions of respective tender conditions, the transporters are required to comply with the provisions of relevant statutes, i.e. Minimum Wages, PF, ESI etc.
2. Contractors were given the contract based on their undertaking of obtaining of PF & ESI code shortly. However after getting the work order, these contractors were reluctant in furnishing documents in support of compliance of PF and ESI as they stated that they do not possess the PF & ESI code.
3. In the meantime, followed by an Audit Observation, Management has decided to deduct and withhold the applicable PF & ESI contribution amounts from the bills of the contractors.
4. After prolonged persuasions, the contractors agreed and obtained PF code from November’14. It also appeared that these contractors were covered under ESI code at the time of commencement of the contract (since January’13).
5. As per the present scenario, the contractors are depositing ESI from beginning i.e. July’13 but amount of deduction is lesser than estimated (as not deducted at par with minimum wages). Regarding PF, these contractors have started depositing PF contributions from November’14. An amount equivalent to PF & ESI contribution for the period from July’13 to October’14 has already been deducted from contractors’ bills and withhold by Accounts dept.
6. View above opinion is solicited on possible actions/measures to be taken by my Company as Principal Employer towards statutory compliance with specific views on the following:
(a) As the Transport Contractors did not have PF codes allotted in their firms names prior to Nov’14, so they are not able to deposit the PF contributions for the period between Jul 13 to Oct 14. My Company has deducted amount equivalent to PF and ESI liability of the contractors’ for the non coded period i.e. from Jul’13 to Oct’14 and retained the money as my Company cannot deposit the same in the code of the contractors and also cannot directly deposit to PF authorities and in no way contribution for the past period can be deposited by the Contractor too. What will be the viable and possible course of action to ensure compliance of PF for the non coded period.
As our Company is also not interested to hold the amount deducted on a/c of PF contribution amount recovered from the contractors’, what is the right course of action open to my company (Principal Employer) for statutory compliance.
(b) For Contractors’ who were having ESI code since commencement of the contract, what is possible option available for statutory compliance of ESI and whether the deducted money or part thereof may be returned to the Vendor.
Rgds,
DG
1. My Company (a PSU, manufacturing industry) outsourced the transport service since July’13. As per the terms and conditions of respective tender conditions, the transporters are required to comply with the provisions of relevant statutes, i.e. Minimum Wages, PF, ESI etc.
2. Contractors were given the contract based on their undertaking of obtaining of PF & ESI code shortly. However after getting the work order, these contractors were reluctant in furnishing documents in support of compliance of PF and ESI as they stated that they do not possess the PF & ESI code.
3. In the meantime, followed by an Audit Observation, Management has decided to deduct and withhold the applicable PF & ESI contribution amounts from the bills of the contractors.
4. After prolonged persuasions, the contractors agreed and obtained PF code from November’14. It also appeared that these contractors were covered under ESI code at the time of commencement of the contract (since January’13).
5. As per the present scenario, the contractors are depositing ESI from beginning i.e. July’13 but amount of deduction is lesser than estimated (as not deducted at par with minimum wages). Regarding PF, these contractors have started depositing PF contributions from November’14. An amount equivalent to PF & ESI contribution for the period from July’13 to October’14 has already been deducted from contractors’ bills and withhold by Accounts dept.
6. View above opinion is solicited on possible actions/measures to be taken by my Company as Principal Employer towards statutory compliance with specific views on the following:
(a) As the Transport Contractors did not have PF codes allotted in their firms names prior to Nov’14, so they are not able to deposit the PF contributions for the period between Jul 13 to Oct 14. My Company has deducted amount equivalent to PF and ESI liability of the contractors’ for the non coded period i.e. from Jul’13 to Oct’14 and retained the money as my Company cannot deposit the same in the code of the contractors and also cannot directly deposit to PF authorities and in no way contribution for the past period can be deposited by the Contractor too. What will be the viable and possible course of action to ensure compliance of PF for the non coded period.
As our Company is also not interested to hold the amount deducted on a/c of PF contribution amount recovered from the contractors’, what is the right course of action open to my company (Principal Employer) for statutory compliance.
(b) For Contractors’ who were having ESI code since commencement of the contract, what is possible option available for statutory compliance of ESI and whether the deducted money or part thereof may be returned to the Vendor.
Rgds,
DG