Company Responsibility for Contractor's EPF Payment
Whether the company can be held responsible for a contractor's failure to pay EPF if the contractor has their own registration. Additionally, can the principal employer be penalized for the contractor's default?
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From India, Mumbai
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1Whether the company can be held responsible for a contractor's failure to pay EPF if the contractor has their own registration. Additionally, can the principal employer be penalized for the contractor's default?
Regards
From India, Mumbai
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Any person employed directly or through a contractor in an establishment or in connection with the work of the establishment would also be termed as the 'employee' of that particular establishment as per Section 2(f) of the EPF & MP Act, 1952. It is needless to reiterate that all the above contract employees would need to be enrolled under the PF Code Number of the establishment.
In case such contract employees are enrolled under a separate PF code number of the contractor, it is the principal employer's duty to ensure that contributions at the prescribed rates are deducted and remitted by the contractor in respect of the said contract employees. Failing which, being the principal employer, the establishment will be held liable for the payment of such contributions also.
Detailed Explanations as per Legal Provisions
Para 30. Payment of Contribution:
• The employer shall, in the first instance, pay both the contribution payable by himself (in this Scheme referred to as the employer's contribution) and also, on behalf of the member employed by him directly or by or through a contractor, the contribution payable by such member (in the Scheme referred to as the member's contribution).
• In respect of employees employed by or through a contractor, the contractor shall recover the contribution payable by such employee (in this Scheme referred to as the member's contribution) and shall pay to the principal employer the amount of the member's contribution so deducted together with an equal amount of contribution (in this Scheme referred to as the employer's contribution) and also administrative charges.
• It shall be the responsibility of the principal employer to pay both the contribution payable by himself in respect of the employees directly employed by him and also in respect of the employees employed by or through a contractor and also administrative charges. [Explanation – For the purpose of this paragraph the expression "administrative charges" means such percentage of the pay (basic wages, dearness allowance, retaining allowance, if any, and cash value of food concessions admissible thereon) for the time being payable to the employees other than an excluded employee, and in respect of which provident fund contributions are payable as the Central Government may, in consultation with the Central Board and having regard to the resources of the Fund for meeting its normal administrative expenses, fix]
Para 36-B. Duties of Contractors:
Every contractor shall, within seven days of the close of every month, submit to the principal employer a statement showing the recoveries of contributions in respect of employees employed by or through him and shall also furnish to him such information as the principal employer is required to furnish under the provisions of the Scheme to the Commissioner.
Hope the above information suffices the need.
Thanks & Regards,
Dikshit T G S.
From India, Hyderabad
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In case such contract employees are enrolled under a separate PF code number of the contractor, it is the principal employer's duty to ensure that contributions at the prescribed rates are deducted and remitted by the contractor in respect of the said contract employees. Failing which, being the principal employer, the establishment will be held liable for the payment of such contributions also.
Detailed Explanations as per Legal Provisions
Para 30. Payment of Contribution:
• The employer shall, in the first instance, pay both the contribution payable by himself (in this Scheme referred to as the employer's contribution) and also, on behalf of the member employed by him directly or by or through a contractor, the contribution payable by such member (in the Scheme referred to as the member's contribution).
• In respect of employees employed by or through a contractor, the contractor shall recover the contribution payable by such employee (in this Scheme referred to as the member's contribution) and shall pay to the principal employer the amount of the member's contribution so deducted together with an equal amount of contribution (in this Scheme referred to as the employer's contribution) and also administrative charges.
• It shall be the responsibility of the principal employer to pay both the contribution payable by himself in respect of the employees directly employed by him and also in respect of the employees employed by or through a contractor and also administrative charges. [Explanation – For the purpose of this paragraph the expression "administrative charges" means such percentage of the pay (basic wages, dearness allowance, retaining allowance, if any, and cash value of food concessions admissible thereon) for the time being payable to the employees other than an excluded employee, and in respect of which provident fund contributions are payable as the Central Government may, in consultation with the Central Board and having regard to the resources of the Fund for meeting its normal administrative expenses, fix]
Para 36-B. Duties of Contractors:
Every contractor shall, within seven days of the close of every month, submit to the principal employer a statement showing the recoveries of contributions in respect of employees employed by or through him and shall also furnish to him such information as the principal employer is required to furnish under the provisions of the Scheme to the Commissioner.
Hope the above information suffices the need.
Thanks & Regards,
Dikshit T G S.
From India, Hyderabad
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Yes, the principal employer is fully and finally liable for any contractor flaws in EPF. Even though the employee is under a contractor, the principal employer is ultimately responsible for any payments or procedures.
Not only for EPF, but in any law, the principal employer is the final liable person for any issue related to their manufacturing process or services.
Regards,
Ramnarayan
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From India, Hyderabad
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Not only for EPF, but in any law, the principal employer is the final liable person for any issue related to their manufacturing process or services.
Regards,
Ramnarayan
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[Phone Number Removed For Privacy Reasons]
From India, Hyderabad
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Hi all If the contractor is having seperate Provident fund A/c no and it has seperate identity as an establishment the principal employer is not liable for any legal action. regards
From India, Mumbai
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From India, Mumbai
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Mr. Bt_gujarat, having a PF Number won't define whether he/she is a principal employer or a contract employer. It's just an account number where PF-related transactions will take place.
If a contractor has a separate identity and (separate premises), then he won't be called a contract employer; he will be called a principal employer for that separateness.
Understanding the Act
Before raising any topic, please go through the Act. In most Acts, section 2 is filled with definitions that are crucial. By studying those, you will gain a clear understanding of who is a contractor and who is a principal employer. (Ref: Contract Labour Act)
From India, Hyderabad
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If a contractor has a separate identity and (separate premises), then he won't be called a contract employer; he will be called a principal employer for that separateness.
Understanding the Act
Before raising any topic, please go through the Act. In most Acts, section 2 is filled with definitions that are crucial. By studying those, you will gain a clear understanding of who is a contractor and who is a principal employer. (Ref: Contract Labour Act)
From India, Hyderabad
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What action the PF and ESIC will take if Prinicpal Employer also not pay as it has already paid to the Contrator?
From India, Mumbai
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From India, Mumbai
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If the Principal Employer does not ensure that the contractor has paid the ESI/PF, then the ESI & PF offices will penalize the Principal Employer for not ensuring the same. Thus, the Principal Employer needs to check on this by collecting the respective ESI/PF challans from the contractor.
From India, Bangalore
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From India, Bangalore
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Even though the contractor has separate code numbers for both ESI and EPF and is remitting the contribution of both employees and employers while working on different project sites, does the principal employer have the right to ask the contractor to remit all EPF and ESI contributions to the principal employer's code numbers?
Appreciate your clarification, please.
Thanks and regards,
S. Muralidaran
From India, Coimbatore
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Appreciate your clarification, please.
Thanks and regards,
S. Muralidaran
From India, Coimbatore
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36-B. Duties of Contractors
Every contractor shall, within seven days of the close of every month, submit to the principal employer a statement showing the recoveries of contributions in respect of employees employed by or through him. They shall also furnish to him such information as the principal employer is required to furnish under the provisions of the Scheme to the Commissioner.
From India, Delhi
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Every contractor shall, within seven days of the close of every month, submit to the principal employer a statement showing the recoveries of contributions in respect of employees employed by or through him. They shall also furnish to him such information as the principal employer is required to furnish under the provisions of the Scheme to the Commissioner.
From India, Delhi
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If a contractor submits EPF & ESIC after the cut-off date (15th & 21st of the next month), what is the liability of the principal employer? Is the principal employer liable for the delay in payment and could be penalized by the department.
From India, Calcutta
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From India, Calcutta
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Dear Seniors and Friends, please guide me on the following point:
If a contractor submits EPF and ESIC after the cutoff date (15th and 21st of the next month), what is the liability of the principal employer? Is the principal employer liable for the delay in payment and could be penalized by the department?
From India, Calcutta
Acknowledge(0)Amend(0)
If a contractor submits EPF and ESIC after the cutoff date (15th and 21st of the next month), what is the liability of the principal employer? Is the principal employer liable for the delay in payment and could be penalized by the department?
From India, Calcutta
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Principal employer liable if contractor fails to pay wages to workers Delhi High Court Judgement.pdf