Hiring Consultants: How Long Can They Stay and What Benefits Do They Get?

Hi all, I need assistance on the Consultant role. We are hiring people for the contractual role in our organization. What is the maximum duration that one person can be in a consultant role? What will be the leave policy for them? Are they eligible for any statutory benefits?

Hi, Part-time consultants work on an assignment basis or for a fixed tenure as mutually agreed between the employer and consultant. It can also be fixed for a certain period subject to extension for a specific period based on work requirements. For such part-time consultants, statutory requirements like PF are not applicable; only Tax Deducted at Source will be applicable at 10% on the total retainer fee.

However, to evade statutory requirements, if you are hiring as a consultant, it is not advisable. If the hired employee is going to spend the whole time at the office like a regular employee, then all statutory benefits, including leave benefits, should be made applicable to them, like other employees on regular rolls.

There is no maximum period for engaging any consultant. You can engage a consultant for a particular project or for a specific period, but there is no limit to the duration.

Consultant Engagement and Leave Policy

A consultant is not governed by the HR rules of the organization, and as such, leaves are not admissible to a consultant. The period of their absence should not be considered as 'absent' from 'work'. A consultant is a professional who can be consulted for guidance, advice, and opinions and should not be placed in a work structure with reporting requirements, following a 9 am to 6 pm, Monday to Friday work schedule, etc.

Hi Sir, Thank you for your response. Are consultants or gig workers eligible for statutory benefits from the company's side, such as PF, ESIC, medical insurance, etc.?

If the above criteria are satisfied, the consultants will be eligible for all statutory contributions. At the same time, if the consultant is a genuine consultant independent of all HR practices and procedures of the company, there is no need to cover them under any ESI/PF or make bonus payments. Gig workers are yet to get a separate employment status. However, in the present scenario, I am of the opinion that they are employees of the company they work for, and as such, you cannot avoid making statutory payments like ESI, PF, Bonus, Gratuity, etc.