Would appreciate any help on this matter. Thanks, Neha
From India, Chandigarh
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From India, Chandigarh
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Dear Neha,
Greetings for the day. It's true that before engaging any external agencies, the following regulations should be complied with: agencies must be covered under the Contract Labour Act, EPF, and ESIC Act. Secondly, the enforcement officer of EPFO correctly explained that proof of payment must be shown during compliance. If your contractor is unable to provide the same, you must recover the same amount from the bill raised from the contractor. But keep in mind, in these types of issues or disputes, the principal employer is liable for payment.
Thanks & Regards,
Sumit Kumar Saxena
From India, Ghaziabad
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256Greetings for the day. It's true that before engaging any external agencies, the following regulations should be complied with: agencies must be covered under the Contract Labour Act, EPF, and ESIC Act. Secondly, the enforcement officer of EPFO correctly explained that proof of payment must be shown during compliance. If your contractor is unable to provide the same, you must recover the same amount from the bill raised from the contractor. But keep in mind, in these types of issues or disputes, the principal employer is liable for payment.
Thanks & Regards,
Sumit Kumar Saxena
From India, Ghaziabad
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It is not the principal employer's liability to present PF and ESIC Challan for contract employees. You can clearly state to ESIC/PF officials that you are paying a lump sum amount to the contractor, and he gives the salary to his workforce, who are delivering jobs at your workplace. Simultaneously, you are only handling the attendance register provided by the contractor to check the daily presence of his workforce.
Regards
From India, Mumbai
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Regards
From India, Mumbai
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Principal Employer's Responsibility for Contract Workers' Wages
The act very clearly states that the principal employer is responsible for the payment of wages and all statutory dues for the contract workers. So, you cannot escape your liability by saying the contractor did not pay it, or that he lied to you.
Since it is your liability to ensure payment, you need to have proof that the payment was made and that it was of the correct amount. The PF inspector is well within his rights to demand the same. He probably has already obtained information from his system that it has not been paid.
The first liability is on you, so the PF department (not the inspector) can raise a notice asking for the same along with a penalty or interest; you need to pay and are allowed by law to recover the same from the contractor.
Ensuring Compliance with PF Payments
Going forward, you need to check the payments made by contractors. Don't rely solely on challans; ask the contractor to log into the portal and download the ECR and reports and verify that all contract workers working for you are covered in it.
From India, Mumbai
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The act very clearly states that the principal employer is responsible for the payment of wages and all statutory dues for the contract workers. So, you cannot escape your liability by saying the contractor did not pay it, or that he lied to you.
Since it is your liability to ensure payment, you need to have proof that the payment was made and that it was of the correct amount. The PF inspector is well within his rights to demand the same. He probably has already obtained information from his system that it has not been paid.
The first liability is on you, so the PF department (not the inspector) can raise a notice asking for the same along with a penalty or interest; you need to pay and are allowed by law to recover the same from the contractor.
Ensuring Compliance with PF Payments
Going forward, you need to check the payments made by contractors. Don't rely solely on challans; ask the contractor to log into the portal and download the ECR and reports and verify that all contract workers working for you are covered in it.
From India, Mumbai
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Understanding the EPF Act and ESI Act Compliance
The objective behind the EPF Act and ESI Act is to ensure that every worker, whether permanent, temporary, or contractual, receives the benefits of these two labor welfare legislations. Therefore, the labor inspector is well authorized to request compliance from all workers at your premises, whether they are your direct employees or provided by your contractor. Hence, when making payments to your contractor, you have the right to ask for EPF and ESI Challans as proof of payment for EPF and ESI for the contractual workers at your premises.
Regards, Ashok Sharma
From India
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The objective behind the EPF Act and ESI Act is to ensure that every worker, whether permanent, temporary, or contractual, receives the benefits of these two labor welfare legislations. Therefore, the labor inspector is well authorized to request compliance from all workers at your premises, whether they are your direct employees or provided by your contractor. Hence, when making payments to your contractor, you have the right to ask for EPF and ESI Challans as proof of payment for EPF and ESI for the contractual workers at your premises.
Regards, Ashok Sharma
From India
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Principal employer liable if contractor fails to pay wages to workers Delhi High Court Judgement.pdf