How to Handle Unpaid Statutory Benefits for Contractor's Workers in Civil Design Projects?

Dear Seniors,

Please advise on the below-mentioned.

Company: Civil Interior Designing

Question: Engaged an external civil contractor's laborers to work on the site and later discovered that the contractor is not maintaining the statutory requirements such as PF & ESI for his workers. What is the procedure to compensate for the work previously done?

Regards,
Venu

If there are PF & ESI codes of the organization, it will be required to calculate the past liabilities and deposit the same with the authorities. Penal interest, etc., will also be required to pay after settling the original dues.

Regards, S K Bandyopadhyay

There is a legal point in your favor regarding the non-applicability of this work under the EPF Act 1952. The EPF Act envisions the coverage of all persons engaged in or in connection with the work of the establishment. The work of civil interior designing is not an integral part of the work to be done in the firm, it is presumed. So, although the work is carried out on the premises, it cannot be said to be the liability of the Principal Employer to ensure coverage. A doubt remains for this work: did the contractor deploy 10/20 workmen, the threshold limit for compliance with ESI/PF Acts?

A practical instance that has happened is that there was a small culvert in the factory premises that caved in, and it was redone by a contractor who had no PF registration. Later, when the EPFO inspector questioned us, we used this legal principle to defend ourselves, and they left without escalating it into an issue of non-compliance.