How Should Employees and Companies Respond When Contractors Fail to Pay EPF?

Hello Everyone, we need answers to the following questions:

Employee Actions When EPF is Unpaid

1. If the contractor has not paid the EPF amount for each month of Casual Leave (CL) and the CL employee resigns after discovering that the PF amount has not been paid properly, what should the CL employee do?

Company Actions Against Non-compliant Contractors

2. What action should the company take against that contractor?

Liability of the Principal Employer for EPF Contribution

If the contractor has not remitted the EPF contribution, then the Principal Employer is liable. The contract labor should bring this to the notice of the concerned PF Inspector; the rest of the action would follow.

Actions Based on Contract Terms

The action the company can take would depend on the contract terms between the two. If the contract has a specific term bestowing the responsibility for PF compliance on the contractor, then the Principal Employer can deduct the PF amount it has paid directly to EPFO from the bills and other dues of the contractor.