Need Quick Advice on Security Service Quotation and Compliance Issues in H.P.

Dear Seniors,

We are searching for some good security services. This is the quotation which I received from one of the security services. I have certain doubts kindly help me out:

1. What is the minimum wage to be given in H.P. according to the Factories Act?
2. PF is charged at 13.61%, but I think it should be 12%.
3. ESI is 4.75%, which I think is correct as the employer's share.
4. Do we need to pay relieving charges of 16.66% to them?
5. Admin charges and service charges are added twice, aren't they the same?

If there are any other comments, kindly let me know. The file is attached for review. I am waiting for all your valuable responses. I need to close the issue today.

Thanks in Advance.

Regards,
Shweta Swarnkar

Hi,

Please find the following clarifications:

1. Minimum wages are to be paid according to the State Minimum Wages, which falls under the Minimum Wages Act. State Minimum Wages mention wages for skilled, semi-skilled, and unskilled categories of employees. You can obtain this information from the Labour Department.

2. PF: 13.61% means 12% PF + 1.61% Administrative Charges.

3. ESI contribution is 4.75% (Employers' Contribution) and 1.75% Employees' Contribution. You are correct in this regard. The wage ceiling for ESI is now 10,000/- per month.

4. Admin Charges and Service Charges: Service Charges refer to the profit of a contractor, which you can negotiate. I am unclear about Admin Charges.

5. Relieving Charges have to be paid.

Thank you.

You must buy the Minimum Wages Act applicable in Himachal Pradesh. PF is 12% + 1.10% admin charge + 0.5% (if not covered with LIC for EDLI), and the remaining admin charges are under EDLI. Please visit epfindia.com for further clarification on P.F.

Neeraj

Dear member,

I agree with Vedalia. Moreover, I would like to state that the statutory laws applicable to your factory should also be adhered to by the contractor. For example, leave wages are to be paid, and a bonus of 8.33% should be paid as well. Whether you reimburse them is a different question.

I have observed that most security contracts do not consider these aspects. The assumption made is that it is a job contract. Additionally, some security contracts operate on a 12-hour basis. The extra 4 hours should be treated as double Overtime, but only a single wage is considered.

Hi, I would like to confirm that the bonus is to be paid at 8.33% of the Basic Salary and it is to be paid after every year, mostly on Diwali. Please clarify this point of mine.

Akshita

Dear Shweta,

I have seen the quotation which you have attached here. I would say everything is okay, the vendor has given you a minimum quote, and he has fulfilled the statutory compliances, which is a very good thing.

Regards,
Jagdish Pathak

Minimum Wages in Himachal Pradesh

Minimum wages in Himachal are ₹5100 for unskilled, ₹5354.10 for semi-skilled, and ₹6425.10 for skilled labor. This rate will be revised next month.

Employee State Insurance (ESI) and Provident Fund (PF) Contributions

- ESI: 1.75% of gross salary contribution by the employee and 4.75% of gross salary contribution by the employer.
- PF: 12% of basic salary contribution by the employer and 1.61% of basic salary as a contribution for administrative charges by the employer.

Salary Slab and Relieving Charges

The salary slab is for 8 hours and for 26 days. Relieving charges of 4 days would be 16.66% of the gross salary. For 12 hours, add an additional 50% of the salary.

I went through your thread. I hope you have found the answers to your questions. Admin charges are mandatory to be paid. Relieving charges are 16.67% if rounded off. The PF percentage has been revised by the government, i.e., 13.36% employer's and 12% employee's contribution.

Further, I would like to tell you that I work in a security organization, i.e., "Secured Security Solutions." It has its presence all around India. If there is any other contract or query, do email me at [Email Removed For Privacy Reasons].

Thanks and Regards.