Navigating ESI and PF Registrations for Contract Labor: Do Contractors Need Separate Licenses?

Dear folks,

Our establishment in the fabrication engineering sector is newly going to engage contract labor next month onwards under the CL Act. The total number of contract labor needed is 48, which is split among 5 contractors (i.e., each contractor will have 9 laborers). It is important to note that these contractors do not have licenses and ESI PF registrations.

Queries regarding ESI and PF registrations

I have some queries that need clarification:

1. Should each contractor obtain separate ESI and PF registrations? (The Act specifies that 20 or more workers would be eligible.)
2. Should each contractor obtain a separate license? (The Act specifies that 20 or more workers would be eligible.)
3. Alternatively, should both ESI and PF registrations and licenses be obtained for the total number of laborers engaged by the principal employer (i.e., 48 laborers)?

Please provide clarification on the above queries as soon as possible.

Thank you.

If the Contractor did not have the ESI and PF Code. Then the contract labours will be recovered ESI and PF on the Principle Employer's code number. It is always better to engage a contractor who has his own ESI& PF code.

Dear Gobikannan,

This is a common question for many organizations: if contractors are engaging people who are 9 or below, is it necessary to have PF, ESI, etc. for them? Please note that these contractors will work on the premises of the PE, which is covered under PF, ESI, etc. Therefore, Mr. Babu Alexander's suggestion is the best and it is advisable to implement the same.

Thanks & Regards,
S K Bandyopadhyay (Howrah, WB)
skb@usdhrs.in