Understanding Principal Employer Roles and Liabilities in Contract Labor Agreements

Principal Employer in Contractual Agreements

Who is the principal employer if there is a contract with the agency, and the agency deputes its staff to work onsite in any organization?

Liabilities of the Organization

What are the liabilities of the organization on whose premises the workers/contract laborers are working?

Salary and Deductions

In terms of salary, are any PF deductions, etc., needed to be made?

Registration for Contract Labor

Is registration mandatory for contract labor by the organization where staff/laborers are working onsite, even if the contract is with the agency?

This query is in regard to the Bank.

Principal Employer in Contractual Agreements

1. A principal employer, in the context of the 'contract' with the agency, is the organization where employees are deployed.

Liabilities of a Principal Employer

2. All liabilities of a principal employer.

Compliance Responsibilities

3. Yes, the contractor shall comply with it. The principal employer shall ensure that the contractor fulfills compliance formalities.

Registration for Employing Contract Labor

4. To employ contract labor, it is mandatory to register the establishment. The principal employer shall submit an application in the given format.

Registration Requirements for Contract Employees

Please advise if registration is still required when the number of contract employees is fewer than 20. Additionally, is the registration process required to be completed separately by each office or branch premises, or can a regional office handle it on behalf of each branch or office?

If I have understood correctly, the arrangements in the present case are as follows: your bank has engaged the agency to provide services at your clients' locations through a contract. In this case, the bank is the Principal Employer (P.E) and the agency is the Contractor. The deployment on-premises or off-premises is not material in this case. All liabilities and responsibilities will be handled by the agency as the Contractor and by the bank as the Principal Employer. Social security compliance (EPF & ESI) will be ensured by the Principal Employer, possibly through the agency/Contractor. Yes, bank registration is a requirement if the number of contract laborers in this specific contract, either on its own or combined with other contracts for labor supply with the bank, exceeds 20 individuals.