Classification of Need-Based Workers in Pharma Research
We belong to the Pharma Research Industry and conduct research on healthy human beings. We have in-house doctors, nurses, custodians, and lab technicians properly employed as per the Shops and Establishment Act. We use a CTC style for preparing the pay process, and we are an MNC.
My query concerns the employees we engage on a need basis. For example, when we conduct research, we may require external nurses, doctors, and custodians to support our activities in addition to our regular staff. They are paid based on the hours they work. For instance, some nurses work for 2 hours a day, while others work for 20 to 30 hours a week. We call them as and when there are requirements. They come, work, and get paid based on the number of hours they work. For example, we pay Rs. 92/- per hour of their work.
Classification and Benefits for Need-Based Workers
Do we need to classify them as contract employees, part-time employees, or just need-based workers? In such cases, should we deduct PF and ESI for them? Currently, we are deducting TDS and paying them.
If PF and ESI should be paid, how do we structure their basis? PF has to be paid on the basic (12%).
Some of my officials say they are working on a time basis, so they are not contract workers, and hence PF is not applicable. Others say they are working for the company and contributing to our services, so PF has to be deducted.
Please clarify my queries urgently. I would be grateful for your answers and suggestions.
Regards, Devi Balaji
From India, Madras
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6We belong to the Pharma Research Industry and conduct research on healthy human beings. We have in-house doctors, nurses, custodians, and lab technicians properly employed as per the Shops and Establishment Act. We use a CTC style for preparing the pay process, and we are an MNC.
My query concerns the employees we engage on a need basis. For example, when we conduct research, we may require external nurses, doctors, and custodians to support our activities in addition to our regular staff. They are paid based on the hours they work. For instance, some nurses work for 2 hours a day, while others work for 20 to 30 hours a week. We call them as and when there are requirements. They come, work, and get paid based on the number of hours they work. For example, we pay Rs. 92/- per hour of their work.
Classification and Benefits for Need-Based Workers
Do we need to classify them as contract employees, part-time employees, or just need-based workers? In such cases, should we deduct PF and ESI for them? Currently, we are deducting TDS and paying them.
If PF and ESI should be paid, how do we structure their basis? PF has to be paid on the basic (12%).
Some of my officials say they are working on a time basis, so they are not contract workers, and hence PF is not applicable. Others say they are working for the company and contributing to our services, so PF has to be deducted.
Please clarify my queries urgently. I would be grateful for your answers and suggestions.
Regards, Devi Balaji
From India, Madras
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Clarification on ESI and PF for Need-Based Workers
They are to be subjected to ESI and PF provided their notional salaries do not exceed the ceiling set under each Act, i.e., Rs. 15,000 per month as of now. The nomenclature of payment is not an issue here; what is important is the remuneration for their work. Obviously, if the per-hour rate multiplied by the notional working hours per month exceeds the limit, you can exclude them.
Continuing your example, if the rate per hour is Rs. 92, then it would amount to Rs. 736 per day and Rs. 19,136 per month. In such a scenario, you can exclude them by stating that their notional wages are more than Rs. 15,000.
Regards, Madhu.T.K
From India, Kannur
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They are to be subjected to ESI and PF provided their notional salaries do not exceed the ceiling set under each Act, i.e., Rs. 15,000 per month as of now. The nomenclature of payment is not an issue here; what is important is the remuneration for their work. Obviously, if the per-hour rate multiplied by the notional working hours per month exceeds the limit, you can exclude them.
Continuing your example, if the rate per hour is Rs. 92, then it would amount to Rs. 736 per day and Rs. 19,136 per month. In such a scenario, you can exclude them by stating that their notional wages are more than Rs. 15,000.
Regards, Madhu.T.K
From India, Kannur
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