Navigating Contractor Compliance: How Do Employment Acts Affect Outsourced Workers?

sridharan venkataraman
Contractor Compliance Under Employment Acts

Our factory comes under the purview of the Schedule of Employment to the Minimum Wage Act. However, we do have workmen outsourced from a licensed contractor who provides manpower services to different organizations, one of which is ours. The contractor runs an exclusive office for this purpose.

My queries here are:

1. Whether the contractor who runs an exclusive firm for manpower services to different organizations comes under the Shops and Establishment Act.

2. Whether the contractor is to pay wages to his workforce under the scheduled employment category of Shops and Commercial Establishment, or the contractor should pay his workmen according to wages applicable to the respective schedule of employment under the M.W. Act.

3. Whether an apprentice would be covered under the Standing Orders of the principal employer firm and is to be paid a stipend or wages as required by the Minimum Wages Act.

Request expert views with suitable court decisions/citations.
Madhu.T.K
The contractor should pay minimum wages applicable to the establishment where his employees are deployed. However, if the contractor is covered by another scheduled employment for which separate minimum wages have been notified, then he is bound to pay that minimum wage which is more favorable to the employees.

The trainees, other than apprentices engaged following the Apprentice Act, are to be paid a salary as per the Minimum Wages Act with all PF and ESI benefits.
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