Should We Deduct P.F & E.S.I For 60+ Employees

Hi All,

I am working in an ITES company. Age is no bar for our company. Currently, we have four people whose age is above 60, working with us on a contract basis. However, recently I came to know that even though they are contract employees, we will have to deduct P.F & E.S.I for them. Can we deduct P.F & E.S.I for them? Can we take them on as our full-time employees? What precautions or labor laws will we have to follow when employing people whose age is above 60?

Thanks,
Sumathy Maraimalai

Hi,

You have to register all employees with PF & ESI (For ESI - if their salary is below Rs10,000/-). If the employees' age is above the retirement age and they have already availed the PF benefits, then you need not pay the PF for them.

Regards,
Vijayakumar

Hello Sir,

He had a PF account in his previous company. He joined us only after his retirement. Is it okay if we don't deduct PF for him?

Sumathymaraimalaai

On the issue of contract labour, the Act (CLRA) states that the contractor will be responsible for all the dues owed to the government and the labourers/workers/contract workmen. Regarding the deduction of PF/ESI, it depends on the applicable state; if PF is not applicable, then ESI is and vice versa.

However, it is essential to remember that the contractor must have an ESI/PF number. They must credit the account of the ESI/PF authorities and obtain a "Challan" for the transaction. It is important to retain a copy/triplicate of this document, which will need to be displayed when filing the return.

If the contract workmen perform duties on behalf of the contractor, they will be considered as permanent workmen under your employment.

One way to manage this process is to request the contractor to provide a cheque for ESI and PF payments from their end. Your office boy can then deposit the cheque and obtain the necessary challan. Remember, this document is crucial for compliance purposes.

Regards

Hello,

1. Fixation of age limit is a company's prerogative. No statute governs this issue.
2. If the contract employees are under your contract, then you should deduct PF. Please refer to the definition clause of the PF Act.
3. As long as the employees are under your employment and if their salary doesn't cross 10,000/-, deduction of PF is mandatory.

Thanks and kind regards,
Michael Nicholas