Navigating ESIC and PF Rules: Are We Correctly Handling Contractor Payments?

Hi, we have more than 50 laborers working in our organization. 40 laborers are working on a contractor basis, while the other 10 laborers are covered by ESIC and PF. My question is, the contractor has submitted a bill for 40 laborers with salaries above 25,000/-. According to government rules, ESIC and PF are applicable only for organizations with more than 20 employees. However, in November, we have only paid for 10 laborers. Is this correct or not? If it is wrong, what are the details we need to follow? Thank you.

The principal employer has to ensure that the contractor has paid PF for his workers.

Right now, with only 10 workers, you need not pay PF. But the proposal to reduce the number of workers to 10 is being discussed.

PF can always be paid even if you have 5 workers, but once PF payments start, it cannot be stopped.

EPF Act mandates the payment of PF once a minimum number of workers are employed.

Thank you for your kind information. We have paid PF amounts for more than 25 employees until December 2016. After that, we started working with contractors. Currently, we have paid wages to only 10 employees and obtained the bill copies from the contractor for 40 employees. Do I need to collect any additional documents, or is the bill sufficient?

Dhana.S.

Please refer to the following link: http://epfindia.gov.in/site_docs/PDF...ctor_28445.pdf

Do not bifurcate as our employee and contractor. If including both, and there are more than 10 employees, then ESI is applicable. If both, including more than 20 employees, EPF is applicable. Once both acts become applicable, even if there is one employee, it will still be applicable.