Verify Contract Labour PF & ESI Deposed Or Not

Dear Sir,

How can we verify whether the contractor's labor has deposited PF & ESI or not?

In ESI, you can use the facility of "IP Mapping with Contractor".

For PF, you can get the "Para 36B Proforma" filled and signed by the contractor every month, along with the PF paid challan.

Please instruct the Contractor to submit copies of ECR (both PF & ESI) every month for your verification. It is preferable to obtain soft copies so that you can update the data every month.

Regards,
N. Nataraajhan
Sakthi Management Services
Hp: +919483517402
Email: natraj@sakthimanagement.com

ECR checking is the best way to cross-check the contractual labor PF-ESI. I have prepared a format for my company through which wages, PF, ESI, PT, etc., statutory obligations can be checked. It is a type of undertaking from the contractor that is required to be submitted along with the monthly bills (previous month's data needs to be submitted in the current month's invoice). Though there is no legal authenticity to the format, since it is signed by the contractor, it creates some pressure, and we receive updated monthly data. This is also helpful when the contractor is working on a percentage basis of the monthly CTC of contractual labor. Hope this will help you. For more clarification, fellow members can suggest their valued advice/s.

Besides ECR and challan, one needs to do the following:

- Ask for Remittance Confirmation Slip (RCS).
- Ensure 'TRRN' is the same for ECR, challan, and RCS.
- Ensure the challan displays contributions for all the accounts.
- RCS is the proof that the amounts have reached the PF office.
- Most importantly, cross-check ECR contributions with the wage register and pay slip for a few employees.

This is a total check!

Okay!

I do appreciate obtaining ECR from the contractor. With these procedures, we can confirm that they made the payment to a particular employee. However, for example, if the contractor has 10,000 or more employees (like G4S or ISS) all over India, their PF contribution is from one location (e.g., Gurgaon or Patna), and only 3 employees are working with you (for instance, in Chennai), then I think ECR collection (which contains the details of 10,000+ employees) will be an unnecessary time-consuming task.

During Statutory Audit, only physical documentation is valid, such as a screenshot of "IP Mapping" in ESI and "Para 36B Proforma" for PF along with paid challans. Self-developed Excel sheets may be useful for tracking, but they cannot be considered a statutory document.

Please correct me if I'm wrong.

Please ask for a soft copy of the ECR file and verify. G4S and ISS are reputed vendors, but you still need to ensure that they have not missed any of your site employees. The work may be time-consuming, but it will guard you against future issues.

The contractor is submitting copies of the challan. However, can somebody help me by letting me know how to actually check the challan? Whether the amounts mentioned are the actual deductions the contractor is required to make. For example, if the basic pay of a contract worker is Rs. 17,000.00, then how much is to be deducted on account of EPF and ESIC and deposited with authorities.