Respected Seniors & fellow colleagues,
My organization is facing a Provident Fund issue due to our labor contractor. The matter goes like this: we hired a labor contractor in the year 2012 to engage approximately 10 workers under his contract. Somewhere between 2012 and 2014, the contractor started to be non-compliant with PF remittances for the workers. We became aware of this in February 2014, and from then on, we stopped paying the total amount of his bill. Instead, we only paid basic wages or slightly more against the bills he presented. Simultaneously, we asked him to generate and make payments for the pending PF challans. Initially, he started making payments for the backdated pending challans, but then stopped doing so. Despite his requests for the outstanding amount, we refused and instructed him to pay the challans. Last year, in 2016, we decided to have challans and ECRs generated by him and made payments from our account. We managed to pay the challans for around 9-10 months until he stopped providing us with the challans. Now, as the principal employer, we are stuck with outstanding PF challans for almost 1.5 years from March 2014 to October 2015.
In January 2017, he failed to pay the workers' salaries from the amount we gave him, prompting us to terminate the labor contract. We arranged extra funds to pay the salaries. We have not yet issued a work order cancellation letter to the previous contractor due to the pending PF issue. Therefore, since February 2017, we have shifted all the workers to a new labor contractor with a history of regular PF compliance and other statutory obligations.
The previous labor contractor has received a damages/penalty payment notice from the PF office and is pressuring us to make the payment. According to my communication with PF officials, our company has been advised not to pay anything until the contractor provides us with the challans. Then, we pay the challans, followed by the damages and penalties (which will ultimately fall on us), and only then will the PF office issue us a NO DUE CERTIFICATE. We are willing, prepared, and ready to prioritize paying the PF remittance dues as the safety of the workers' invested/deducted money in the PF is paramount to us, as communicated to the EPFO.
Is there any action to be taken on my end in this case? I anticipate receiving a notice or summons from the EPFO as we are the principal employer, and we doubt the contractor will be able to pay the damages.
My organization is facing a Provident Fund issue due to our labor contractor. The matter goes like this: we hired a labor contractor in the year 2012 to engage approximately 10 workers under his contract. Somewhere between 2012 and 2014, the contractor started to be non-compliant with PF remittances for the workers. We became aware of this in February 2014, and from then on, we stopped paying the total amount of his bill. Instead, we only paid basic wages or slightly more against the bills he presented. Simultaneously, we asked him to generate and make payments for the pending PF challans. Initially, he started making payments for the backdated pending challans, but then stopped doing so. Despite his requests for the outstanding amount, we refused and instructed him to pay the challans. Last year, in 2016, we decided to have challans and ECRs generated by him and made payments from our account. We managed to pay the challans for around 9-10 months until he stopped providing us with the challans. Now, as the principal employer, we are stuck with outstanding PF challans for almost 1.5 years from March 2014 to October 2015.
In January 2017, he failed to pay the workers' salaries from the amount we gave him, prompting us to terminate the labor contract. We arranged extra funds to pay the salaries. We have not yet issued a work order cancellation letter to the previous contractor due to the pending PF issue. Therefore, since February 2017, we have shifted all the workers to a new labor contractor with a history of regular PF compliance and other statutory obligations.
The previous labor contractor has received a damages/penalty payment notice from the PF office and is pressuring us to make the payment. According to my communication with PF officials, our company has been advised not to pay anything until the contractor provides us with the challans. Then, we pay the challans, followed by the damages and penalties (which will ultimately fall on us), and only then will the PF office issue us a NO DUE CERTIFICATE. We are willing, prepared, and ready to prioritize paying the PF remittance dues as the safety of the workers' invested/deducted money in the PF is paramount to us, as communicated to the EPFO.
Is there any action to be taken on my end in this case? I anticipate receiving a notice or summons from the EPFO as we are the principal employer, and we doubt the contractor will be able to pay the damages.