I am a civil contractor based in Pune. I have been working with a reputed construction company in Mumbai for the past year. Recently, the principal employer has made it mandatory for all contractors to register under the EPF Act.
However, my proprietary firm employs fewer than 20 employees directly or indirectly. On any given day, the number of workers on the site is less than 20, including supervisory staff. We fail to understand why the principal employer can compel us to register under the EPF Act when the law does not mandate it.
Please advise.
Regards,
ARP
From India, Pune
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However, my proprietary firm employs fewer than 20 employees directly or indirectly. On any given day, the number of workers on the site is less than 20, including supervisory staff. We fail to understand why the principal employer can compel us to register under the EPF Act when the law does not mandate it.
Please advise.
Regards,
ARP
From India, Pune
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Dear Avinashphase, If the principal employer has registered with EPF, you also have to register. The number of employee working with you is immaterial. Abbas.P.S
From India, Bangalore
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530From India, Bangalore
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Understanding PF Rules for Contractors
There are two different rules that apply in your case.
The general rule is that PF applies to all businesses with 20 or more employees. However, the concept has been extended to factories instead of just businesses. So, for a factory, if there are more than 20 persons working, all of them are required to be covered under PF irrespective of who they work for. Therefore, the Principal Employer (PE) is definitely entitled to insist on all contractors being PF registered.
Regards
From India, Mumbai
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There are two different rules that apply in your case.
The general rule is that PF applies to all businesses with 20 or more employees. However, the concept has been extended to factories instead of just businesses. So, for a factory, if there are more than 20 persons working, all of them are required to be covered under PF irrespective of who they work for. Therefore, the Principal Employer (PE) is definitely entitled to insist on all contractors being PF registered.
Regards
From India, Mumbai
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Your employees are working for Principal Employer. When his establishment/organisation is covered under EPF act, you should also get registered /covered under EPF act Regards, Ganesh.H.N
From India, Bangalore
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From India, Bangalore
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It's not the Principal. Yes, the principal employer can do so. The rule does not stop you from providing social security benefits to your employees, whether 20 or less. The principal employer is equally responsible for contractual employees working under his premises, the same as his permanent employees.
From India, Mumbai
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From India, Mumbai
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Principal employer liable if contractor fails to pay wages to workers Delhi High Court Judgement.pdf