Who is responsible to pay bonuses to contractor employees - Principal Employer or immediate employee?

Hello Everyone,

Please let me know who is responsible to pay bonuses to contractor employees - Principal Employer or immediate employee?

Warm Regards
Garima Vyas

Principle Employer is responsible for payment of Bonus to Contract Employees through Contractor.

Garima ji,
First of all please go through the contract wordings and if there any clause exists regarding payment of Bonus then act accordingly, otherwise Principal Employer has to pay Bonus to the Contractor's employees in his/her Supervision.

R K Singh

Agreement between Contractor and PE is very important to determine who is responsible for what. Most of the cases the Contractors to get the business agree with some illogical terms and conditions and PEs think they are gaining. Actually this is win-loss game.

To my opinion the arrangement should be all liabilities - salary, statutory compliance, gratuity, bonus etc. must be borne by PE and contractor may get one service charge which is negotiable between PE and Contractor. This will be win-win situation.

Where arrangement is otherwise, the contractor deprives the contract labor by paying less salary, poor compliance, non payment of gratuity, bonus etc.

PE must have more responsibility to guide the contractor properly instead of throwing them in to deep water without knowing how to swim. Contractors obviously somehow try their level best to survive. PE has also another responsibility to judge proper contractor as majority contractors are lacking of knowledge of labor laws and implications of the same. Ultimate sufferings in long run will be with PE only.

S K Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions
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Dear Sir,
I am housekeeping service provider agency . We bid for tender where PE is writing in tender document to follow all the labor law that's include salary, bonus, leave, gratuity etc. and at the same time in Financial bid format they mentioned only wages+esi+pf . If we calculate all the factor we will never get contract. We have to follow market practice.
You are right PE should only negotiate Service Charge. But it is not happening.
Regards

The liability to pay bonus is on the establishment which is employing the labour as per the Payment of Bonus Act. 1965. Unlike PF & ESI Acts, there is no Principal Employer under the Act, so it is the contractor who is responsible to implement it. But ultimately the financial liability will get passed on to the Principal Employer.