Ensuring Compliance with Labor Laws
The premise that the contractor may be engaging in fraud is concerning. Normal checks and balances should be in place to ensure compliance with labor laws by all contractors as the principal employer. Checks for PF should include requesting proof of monthly PF deposits. In addition to submitting claims for pay and allowances, verification of the previous month's PF deposits should be conducted. The same applies to ESIC, and bonus payments should also be periodically verified.
Checklist for Contractor Verification
Create a checklist of verifications to be carried out for each contractor and ensure verification by requesting attachments of authentic documentation along with payrolls.