Can We Hire Casual Workers on Daily Wages Without Breaking Labor Laws? Seeking Advice on Compliance

Dear All,

Ours is a large-scale automobile dealership network with showrooms, offices, and workshop services. For in-house upkeep and maintenance of the office building and premises, we wish to engage casual workers on daily wages scheduled on a monthly payroll system. While doing so, we don't want to hire them as regular employees, and we do not intend to share the burden of PF/ESI or bonuses being paid to them.

Compliance with Statutory Labor Laws

Is it possible to do this while complying with statutory labor laws? Furthermore, what are the mandatory provisions to be followed and maintained (wage register/sheet, etc.) under labor laws if we pay them a daily wage rate scheduled on a monthly basis?

Pradeep Anwar

Engaging Workers and Statutory Requirements

When you engage workers directly on your monthly payroll system, you are bound to meet the statutory requirements of the employees, as you are the direct employer. Even when you contract out housekeeping and maintenance to a contractor, the responsibility lies with you as the principal employer.

Comparing Direct and Contract Employment

Comparing both options above, it is better for you to engage the workers as contract employees by ensuring that the contractor has all statutory compliant certificates/licenses.

Under the Bihar Contract Labour (R&A) Rules, 1972, we have to go for Registration & Licensing Procedure in the prescribed formats as stipulated and engage the laborers through a licensed contractor. But the total number of laborers required by us is not more than 10-15. Hence, can we engage them directly under the provision of the Contract Labour Act? Please clarify.

Thanks & regards,
Pradeep Anwar

Statutory compliance is a must

It is every employer's obligation if you hire employees for your role or on a contractual basis. This is an HR site, and it is requested that you do not search for any legal escape from statutory obligations.

You have to pay as per minimum wages and comply with EPF, ESIC, PT, PTRC, social welfare fund, bonus, leave with wages, and all applicable allowances. As HR personnel, you can update your employer about all statutory compliance, health, and hygiene of people at work. They are your assets, and if paid well and on time, they will give you the best performance and results.