Does a Contractor Need Their Own PF Number for a Small Team? Seeking Legal Insights

One company has 127 employees on the roll, and the company is covered under the EPF act. This company has hired a contractor for 5-6 laborers (sweeper and laborer for the garden). There is no need to have a Labor License under The CL(R&A) Act by the contractor. The contractor has no PF number.
My query is, does the contractor have to get his own PF number? "Y/N". I would appreciate your reply, supported by the section number of the act.

The contractor can opt for "Voluntary Coverage of his Establishment" since their present employee strength is less than compulsory coverage. Thereafter, the contractor can cover their employees.

Alternatively, the principal employer can cover contract employees under their PF code, since the independent contractor does not have a separate EPF code.

Even if the contractor has no PF code, the Principal employer is liable to pay the contribution on his code under PF Scheme 1952 since the contract workers come within the definition of an employee under Section 2(f) of the PF Act.

B. Saikumar
HR & Labor Relations Advisor
Navi Mumbai

Nature of Employment and Legal Implications

First of all, the nature of the jobs the laborers are engaged in is very much of a perennial nature, and the company is not supposed to engage contract workers for such work. It is contrary to the law and would be treated as a punishable crime. Also, if the workers, at the end of their contract period, claim permanency in the company, a legal forum would definitely award in their favor.

With the aforesaid legality as the premise, it would be detrimental for the company to cover the workers under their PF code, as that would further confirm their claim to permanency of respective services.

It is therefore suggested that the company authority must talk to and convince the contractor to opt for "Voluntary Coverage of his Establishment" under PF. In fact, that is the only way out given the situation.

Regards