Are We Handling PF and ESI Correctly for Skilled Workers Hired Through a Contractor?

We hired a manpower supplier for our manufacturing unit (Contract Labour Act), and he is supplying skilled and unskilled labor to our manufacturing unit. We are paying wages with PF, ESI, S charges, and GST for unskilled labor. For those who earn above ₹22,000/- (Skilled), we are not paying PF & ESI. Is this correct or is there anything else we can ensure in this case? Please suggest.

We are also ensuring that the contractor is paying professional tax as per Telangana state slabs.

We hired a manpower supplier for our manufacturing unit under the Contract Labour Act. The supplier is providing both skilled and unskilled labor to our facility. We pay wages inclusive of PF, ESI, S charges, and GST for unskilled labor. For skilled workers earning above 22,000/-, we do not pay PF and ESI. Is this the correct practice, or is there anything else we should consider in this scenario? Please suggest. Additionally, we ensure that the contractor is deducting and paying professional tax as per the slabs set by the state of Telangana.

Dear Kiran,

As long as the salary/wages of your contract labor remain above the ceiling prescribed under the EPF and ESI Acts respectively, you need not bother about subscriptions under the Acts. Coverage of the Acts is only in respect of establishments and employees employed therein with the salary falling within the prescribed limits either directly or through any agency. One need not take into consideration their employment classification.