Hello All,
1. I have around 25 employees who were getting basic+da more than ₹15,000/-, and we are paying PT. Is this OK for PF exemption?
2. I have a contractor to whom we are paying on a tonnage basis. He is deputing around 6 to 7 people for work daily, and some days only 5 to 6. When I asked him to pay PF, he explained that he is paid on a tonnage basis and he is deploying very few people for work as per the act. Is it okay, or how is the principal employer responsible?
From India, Hyderabad
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11. I have around 25 employees who were getting basic+da more than ₹15,000/-, and we are paying PT. Is this OK for PF exemption?
2. I have a contractor to whom we are paying on a tonnage basis. He is deputing around 6 to 7 people for work daily, and some days only 5 to 6. When I asked him to pay PF, he explained that he is paid on a tonnage basis and he is deploying very few people for work as per the act. Is it okay, or how is the principal employer responsible?
From India, Hyderabad
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PF Coverage and Wage Limit
1. PF coverage continues despite present wages exceeding the wage limit (presently Rs. 15,000/-) set under the PF Act 1952, provided they were already covered. So please check this position.
Applicability of the PF Act
2. The applicability of the PF Act depends on the number of persons working in the establishment. As the contractor laborers are working in your establishment, and it is a covered establishment currently, the coverage extends to these laborers as well. The mere fact that the contractor has only 5-7 laborers does not help you avoid the liability under the Act. It is important to remember that the PF Act places the onus of coverage on the Principal Employer. Therefore, as the P.E., it is your legal liability to ensure their coverage. I presume that the contract is 'in or in connection with the work' of the establishment and is not a one-time activity not connected with your business.
From India, Mumbai
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1. PF coverage continues despite present wages exceeding the wage limit (presently Rs. 15,000/-) set under the PF Act 1952, provided they were already covered. So please check this position.
Applicability of the PF Act
2. The applicability of the PF Act depends on the number of persons working in the establishment. As the contractor laborers are working in your establishment, and it is a covered establishment currently, the coverage extends to these laborers as well. The mere fact that the contractor has only 5-7 laborers does not help you avoid the liability under the Act. It is important to remember that the PF Act places the onus of coverage on the Principal Employer. Therefore, as the P.E., it is your legal liability to ensure their coverage. I presume that the contract is 'in or in connection with the work' of the establishment and is not a one-time activity not connected with your business.
From India, Mumbai
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Principal employer liable if contractor fails to pay wages to workers Delhi High Court Judgement.pdf