Our establishment is a central government PSU located in a particular state. We are hiring vehicles from contractors on a contract basis and paying them on a monthly basis as per the terms of the agreement. Can we term the drivers assigned to the vehicles as "contract laborers"?
Since our establishment is in a particular state, should we follow the wage revision of the central government or the state government? Kindly clarify.
From India, Guwahati
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2Since our establishment is in a particular state, should we follow the wage revision of the central government or the state government? Kindly clarify.
From India, Guwahati
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As stated by you, you are hiring vehicles from transport contractors. You are paying the agreed amount as per the travelled kilometers. The transport contractor becomes your contractor, not his employees.
The drivers should be paid applicable state minimum wages.
From India, New Delhi
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The drivers should be paid applicable state minimum wages.
From India, New Delhi
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Thank you, sir, but we are paying the contractors monthly on a lump sum basis (as per the agreement amount). The Provident Fund of the drivers is being deducted from the contractors' bills at 24.24% and is deposited into their respective EPF Trust accounts.
My question is, since we are following the central PF rules for their PF, why can we not insist that the contractor pay the wages as per the central government rules?
From India, Guwahati
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My question is, since we are following the central PF rules for their PF, why can we not insist that the contractor pay the wages as per the central government rules?
From India, Guwahati
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Engaging Contractors for Vehicle Supply
It is clarified that we are engaging contractors to supply vehicles for a minimum period of three years continuously, depending on their performance. After that, either a new tender is invited, or an extension is granted as per the decision of management.
Against each vehicle, a minimum of one driver is engaged by the contractor. The drivers are employees of the contractors, and the administrative control of the driver rests with the corporation.
Contract Labour Act Reference
The Contract Labour (Regulation and Abolition) Act 1970 Clause 2(b) may please be referred to. As per the provision: "Workmen shall be deemed to be employed... when he is hired in or in connection with such work by or through a contractor with or without the knowledge of the principal employer."
From India, Guwahati
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It is clarified that we are engaging contractors to supply vehicles for a minimum period of three years continuously, depending on their performance. After that, either a new tender is invited, or an extension is granted as per the decision of management.
Against each vehicle, a minimum of one driver is engaged by the contractor. The drivers are employees of the contractors, and the administrative control of the driver rests with the corporation.
Contract Labour Act Reference
The Contract Labour (Regulation and Abolition) Act 1970 Clause 2(b) may please be referred to. As per the provision: "Workmen shall be deemed to be employed... when he is hired in or in connection with such work by or through a contractor with or without the knowledge of the principal employer."
From India, Guwahati
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(Fact Checked)-The classification of drivers as contract labour should be carefully assessed based on the specific terms of engagement. The Contract Labour (Regulation and Abolition) Act, 1970 should be referenced for clarity on this matter. (1 Acknowledge point)
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As a central government PSU, you must also engage other contractors. What are you doing in their cases?
If your PSU is registered as an employer under the State Contract Labour Act and is also the contractor, in that case, state minimum wages will be applicable.
If you are paying the contractor as per central minimum wage, you must insist that the employees receive the benefit. Even if you are paying on a lump sum basis, you must have arrived at the figure after some calculations.
From India, Thane
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If your PSU is registered as an employer under the State Contract Labour Act and is also the contractor, in that case, state minimum wages will be applicable.
If you are paying the contractor as per central minimum wage, you must insist that the employees receive the benefit. Even if you are paying on a lump sum basis, you must have arrived at the figure after some calculations.
From India, Thane
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Dear Member, please clarify your statement that PF Contribution at 24.24% is being deposited to the respective PF Account lying in the PF Trust. Please provide a breakdown of the 24.24%.
Principal Employer and PF Contribution
Is the Principal Employer remitting PF Contribution to the PF Office or Trust?
Contractor and PF Contribution
Is the Contractor remitting PF Contribution to the PF Office or Trust?
Please clarify, "Are we following the central PF rules?" You have admitted that you are paying Contractors on a lump sum basis. Please refer to the Tender/Quotation where the Contractor has given the breakdown. Has the Contractor included the Minimum Wages of the State/Central Govt?
Thank you.
From India, New Delhi
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Principal Employer and PF Contribution
Is the Principal Employer remitting PF Contribution to the PF Office or Trust?
Contractor and PF Contribution
Is the Contractor remitting PF Contribution to the PF Office or Trust?
Please clarify, "Are we following the central PF rules?" You have admitted that you are paying Contractors on a lump sum basis. Please refer to the Tender/Quotation where the Contractor has given the breakdown. Has the Contractor included the Minimum Wages of the State/Central Govt?
Thank you.
From India, New Delhi
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Dear member,
Please go through your agreement. If you are hiring a vehicle for a predecided mileage on a monthly or yearly basis, you have liability as the principal employer only. Regarding wage payment, if your company has more than 50% of shares held by the Central Government, then Central minimum wage applies; otherwise, state minimum wage. The contractor can change the driver at his will, and you have no role in it as per the contract since you are only hiring the vehicle. Hope the issue is clarified.
From India, Pune
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Please go through your agreement. If you are hiring a vehicle for a predecided mileage on a monthly or yearly basis, you have liability as the principal employer only. Regarding wage payment, if your company has more than 50% of shares held by the Central Government, then Central minimum wage applies; otherwise, state minimum wage. The contractor can change the driver at his will, and you have no role in it as per the contract since you are only hiring the vehicle. Hope the issue is clarified.
From India, Pune
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Breakdown of Hire Charge Bill
The breakup of the hire charge bill is against the drivers' salary and the hire charge of the vehicle. The bill is paid on a monthly basis (not on a KM basis).
PF Deduction Details
The PF amount at 24.24% is deducted from the contractor's hire charge bill. Out of this, 12% is from the driver's salary and the remaining 12.24% from the contractor's account. The PF amount is deducted from the monthly bill and deposited by us in our PF Trust Account.
Compliance with Statutory Obligations
Our organization is a Central PSU (Government of India). As per the agreement, the driver's salary is to be paid by the owner of the vehicle. The owner of the vehicle should comply with all the statutory obligations as per the central government/state government rules.
From India, Guwahati
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The breakup of the hire charge bill is against the drivers' salary and the hire charge of the vehicle. The bill is paid on a monthly basis (not on a KM basis).
PF Deduction Details
The PF amount at 24.24% is deducted from the contractor's hire charge bill. Out of this, 12% is from the driver's salary and the remaining 12.24% from the contractor's account. The PF amount is deducted from the monthly bill and deposited by us in our PF Trust Account.
Compliance with Statutory Obligations
Our organization is a Central PSU (Government of India). As per the agreement, the driver's salary is to be paid by the owner of the vehicle. The owner of the vehicle should comply with all the statutory obligations as per the central government/state government rules.
From India, Guwahati
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Central-Governm ent- of-India-Holida y-List 2016.pdf
Central-Governm ent- of-India-Holida y-List 2016-page-001.j pg
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(Fact Checked)-The contractors should follow the central govt rules for wages since PF is being deducted as per central rules. It's important to align all aspects. (1 Acknowledge point)