Struggling with Daily Wage Workers? Understanding and Meeting Statutory Obligations in Remote Areas

Dear All, we are a small company located in a remote place. We are not able to engage contractors effectively. Due to this, we are forced to hire daily wage workers on a daily basis.

Statutory Obligations

I want to know:

1. What statutory obligations are involved?

Fulfilling Statutory Obligations

2. How to fulfill the same?

Thanks in advance.

Daily wage workers and social welfare coverage

Daily wage workers are similar to regular workers in terms of coverage for social welfare legislations like PF, ESI/EC, Labour Welfare Fund legislations, etc. Once the daily wage worker completes 240 days of continuous service in any period of 12 months, their services cannot be abruptly terminated, and the due process of law is to be completed.

Considering the long-term cost implications and presuming that these workers were involved in unskilled operations, it is suggested that you may consider Fixed Tenure Appointments, contract appointments, etc.

Please fulfill all the liabilities under PF, ESI/EC, LWF, etc., as mentioned above by Mr. KK!HR. Maintain one attendance cum wage register to keep records on a daily basis and take all necessary actions at the end of the month or at the beginning of the next month for payment (minimum wages) and other statutory compliance.

Regards, S K Bandyopadhyay

Dear colleague, it is of utmost necessity that when you raise any query, you need to state upfront whether yours is a factory or commercial establishment, the type of business, the state in which it is located, and the number of workers engaged. Several labor laws are both central and state-specific, and their application criteria differ based on whether it is a factory or a commercial establishment, the number of workers, and wages drawn, etc.

Without this information, it is incorrect to advise on making assumptions, as some colleagues have chosen to. If you really want learned and useful advice, all posters must provide this information as a rule.

Regards, Vinayak Nagarkar HR and Employee Relations Consultant

Appreciate your inputs. Our factory manufactures chemical-based products and is located in Haryana. We engage at least 8 daily wage workers paid according to the minimum wages of the state.

These unskilled workers are hired from the local market and usually do not have any ID or bank account details.

I would request you to provide some useful inputs based on the facts provided above.

Regards, Manoj Kumar Head HR

Since your factory employs only 8 workers, the Factory Act (FA) does not apply. The same goes for minimum wages, payment of wages, etc. In this situation, you have no major labor law obligations. These obligations start when you employ 10 or more workers using power or 20 or more workers without using power and engaging in manufacturing activities.

Regards,
Vinayak Nagarkar
HR and Employee Relations Consultant

Thank you very much for your valuable inputs. Just out of curiosity, what happens if the number of employees increases to 20 or more?

Regards,
Manoj Kumar
Head HR

With a workforce strength exceeding 10/20, whether with power or without power, several labor laws such as the Factories Act, ESI, PF, Minimum Wages, Payment of Wages, and Maternity Benefits (if female workers are employed), to name a few, will be applicable. It is essential for you to fulfill your obligations under each relevant Act concerning working conditions, wages, leave, returns, registers, etc.

Regards,
Vinayak Nagarkar HR and Employee Relations Consultant