Navigating PF and ESIC Responsibilities: Can Principal Employers Ensure Subcontractor Compliance?

Dear Team, I'm new to contract labor/statutory works and have a confusion that I hope you can help me with. We are a construction company, acting as the principal employer. Our contractor is "XYZ," who, in turn, employs subcontractors like "abc" and "efg," among others. For certain urgent works, we engaged the contractor "XYZ" without PF and ESIC registration, as it falls under a works contract. We have now requested "XYZ" to enroll their workers under ESIC and PF, but they are not cooperative. It's important to note that "XYZ" has no direct workers; they rely entirely on subcontractors.

Questions Regarding PF and ESIC Enrollment

Here are my questions: 1. Can the principal employer ask subcontractors to enroll under PF and ESIC? 2. If the subcontractors pay ESIC and PF, is the contractor "XYZ" exempt from making these payments again? 3. Will the principal employer still be held liable if the subcontractors pay ESIC and PF, but the contractor "XYZ" does not?

I would appreciate your guidance on these matters. Thank you.

In a nutshell, the principal employer has to ensure with documentary proof that ESIC/PF/PT has been paid for the workers by any immediate or subcontractor. Otherwise, the principal has to deduct the same and pay it. Follow Form XIII and XIV submitted by the contractor, and ask for contribution records / proof of challan.

Contractor XYZ has to obtain registrations under PF & ESI, period. You will have no direct control over subcontractors.

Don't issue any contract unless the new contractor has PF, ESI & the remaining registrations.