Off-Roll Employees in FMCG: Can We Skip Statutory Deductions Legally?

Off-Roll Employees and Statutory Deductions

I am working as an HR professional in one of the FMCG companies. I have a few queries related to off-roll employees, as my company wants to recruit sales employees in various territories but on an off-roll basis. Similarly, they are asking to provide them with an offer letter and have instructed not to deduct their PF, ESIC, or any other statutory dues. I have clearly informed them that this is not appropriate, as there are no laws for off-roll entities in the company, and it would not be possible to hire someone without deducting any statutory deductions and providing them with an offer letter. Am I right or wrong?

Seeking Solutions for Off-Roll Employment

Is there anyone who can help me resolve this problem? I am very certain that I cannot provide an offer letter to anyone who is not on the company's payroll. What is the solution? Please help me.

Regards, Govind

Dear Govind,

The best solution for your problem is to hire an outsourcing company that will recruit people on their payroll for you. Additionally, to avoid statutory deductions like PF and ESIC, you need to ensure that their salary breakup is above 21,000/-, and this information should be communicated and discussed with the outsourced vendor.

Thank you.

Dear Manoj Ji,

Thank you very much for your precious response. I would just like to ask one thing: Is there any scope to hire Off-Roll Employees in the company without providing any statutory or non-statutory benefits?

Thank you.

To me, Manoj's reply seems to be a situationally appropriate one, but it is quite doubtful whether your top management would accept the above suggestion. "Off-roll-employee" is a misnomer for indirect employment. More or less, it is casual employment with perpetual continuity.

Dear Govind,

It is not appropriate to appoint off-roll employees in your company on the company's payroll. In my opinion, you should consider hiring a contractor and let them handle the statutory and other necessary requirements.

Thank you.

Hi Govind, there is one solution that may work for you. There is a scheme called NEEM - National Employment Enhancement Mission. Check the NEEM website for details. It allows you to hire trainees for a period of 3-24 months from specified institutions that qualify under NEEM. They can be removed at any time without reason, and statutory deductions are not applicable to them for the duration of training. This only applies to freshers who have just finished their learning under NEEM. They are not off-role since the company is paying them directly but probably may work for you.

Dear Sir,

You can hire them as a consultant with no PF or ESIC deduction. Please deduct 10% TDS on the offered salary.

What is this off-roll? Does it mean that the employee is not on any roll, or does it mean not on the principal company's rolls?

Not giving PF, ESI, Bonus, Gratuity, etc., is injustice to the employee and unfair labor practice. What type of company is this?