Is a Painter Without Paperwork Eligible for ESI and PF if Paid by Cheque?

If I gave payment to a person who worked on painting at my site and he doesn't have any paperwork or documentation, is he eligible for ESI and PF? I paid him by cheque, deducting 1% for TDS.

If the person is working for the whole calendar year, then they would be counted as an employee. However, if the person is receiving payment after the submission of bills on a piece basis, then it would be considered contract work and outside the purview of the employee/employer relation. In the case of a contract worker, there should be no attendance or master roll entry, at par with regular employees.

Sir, all such workers/persons engaged in painting, whitewashing, or building repairs of premises where the ESI Act, 1948 is applicable are covered under the said Act, provided their wages fall within the range of coverable wages as declared under the Act.

Since you are deducting 1% TDS under section 194C of the Income Tax Act, 1961, it means that contractual laborers, even contract laborers, are entitled to receive ESI and EPF benefits. However, as per sections 40 and 41 of the ESI Act, 1948, the contractor is initially responsible for providing these statutory benefits to its laborers. The principal employer must ensure that contractual laborers are not deprived of such benefits. If the contractor fails to provide these statutory rights to its laborers, the principal employer will then provide these statutory benefits to the contractual laborers engaged at his/her site, and the contribution cost may be deducted from the contract amount.

Thanks & Regards,
V SHAKYA
HR & Labour Laws Advisor

All employees, whether directly or indirectly working on the premises, are liable to be covered under the ESI Act if they are paid less than Rs. 15,000 per month. Assuming that your plant or premises is under ESI and PF coverage and has been notified, please note that PF will also be applicable. Please be careful as there are no exemptions for any day, month, or year. ESI contributions at 6.50% of wages will be deducted if you pay wages up to Rs. 15,000 per month to any painter(s) without complying, which may result in penalties and interest. Mr. Mehta has provided correct advice.

Regards,
RDS Yadav