Understanding Contract Labour Act in Uttarakhand: Who Handles PF, ESI, and Wages?

Dear Dhananjay,

Can I get details on the norms of the Contract Labour Act in Uttarakhand? Is the principal employer responsible for the PF and ESI amounts of the contract labour? Who is supposed to pay the amount? Also, for the contract agreement, should the employer pay only minimum wages?

Regards,
Dhananjay, HR Manager

Dear Dhananjay,

Greetings. The basic and social purpose of the Contract Labour R&A Act, with specific Rules and notification from the respective State Government, is to ensure that the exploitation of contract labour is avoided. It is the primary responsibility of the Contractor to ensure compliance with Acts such as the Payment of Wages Act, Minimum Wages Act, Payment of Bonus Act, EPF Act, ESI Act, and Workmen's Compensation Act. However, in the event of the contractor's failure to comply with these, it is advisable that the Principal Employer pays off these statutory amounts to the concerned authorities and deducts these amounts from the Contractor's dues. Similarly, for the persistent failure of the contractor to fulfill these basic minimum requirements, it is advisable to terminate the contract with him. Hope this is sufficient. In case you need any other additional inputs, please feel free to call me at 09822395659 or email me at abhirutu@rediffmail.com.

Regards and wish you all the best,

Abhirutu

The Contract Labour (R&A) Act is a central Act. Hence, there is no possibility for separate norms for Uttarakhand. However, you can look for state rules. Regarding compliances under ESI and PF Act, the definition of an employee under these statutes covers contract labour as well. Hence, if the contractor is not covered separately, the principal employer is liable for all compliances under these acts. Similarly, under the Contract Labour (R&A) Act, the principal employer is liable to ensure payment of minimum wages to contract labour.

JOHN
mammoottil.john@adityabirla.com

Hi Greetings,

You have to first see whether your organization is under the jurisdiction of the central government or state government. The jurisdiction is as per the Industrial Dispute Act (Section 2(1)(a) of the Contract Labour Act refers). If it is under the state government, then the rules made by the Uttarakhand Government will apply.

Under the Act, the contractor is required to obtain a license from the licensing authority notified by the appropriate government (in this case, perhaps the Uttarakhand Government). The principal employer has to provide a Form V to the contractor duly signed for obtaining the license. As per this, the Principal Employer undertakes to meet the liabilities of the contractor in case he fails to discharge them. As the Principal Employer, you can deduct the expenditure incurred by you for meeting the liabilities from his bills. As a measure of abundant caution, one must take an indemnity bond from the contractor before giving Form V.

P K Misra

Dear all,

Please tell me how much we need to pay to get ESIC code for labor contracting. In Bangalore, they are asking to pay one year full ESI amount for 20 employees in advance. Is this rule applicable everywhere or only in Bangalore?

Please suggest.

Thanks & Regards,
Raman

Dear Raman,

Greetings. On what basis is Bangalore ESI asking for one year advance of ESI contribution for a minimum of 20 employees? What happens if the employee count decreases or increases? Have you paid the so-called Fixed Minimum Contribution? Please reply.

Regards

Dear Uttarakhand Govt,

Please issue Contract Labour licenses for Loading, Unloading, and Packing. If you engage contract labour for factory work, the contractor should have PF/ESI and service tax Uttarakhand code number. Additionally, ensure that you pay monthly as per the Minimum Wages set by the Uttarakhand Govt.

The following percentages should be considered:
- PF: 13.61%
- ESI: 4.75%
- Service charges: 8%

Thank you.

Hi Khyati,

Can anyone give me information regarding contract labour? I am an MBA student in Hyderabad and doing my internship in ONGC Dehradun. The topic given for my project is contract labour. Where can I find the wages of the regular and contract labourers so that I can calculate the cost-benefit analysis? Which websites would be useful for this purpose?

Seeking quick replies.

Regards,
Khyati