We have a manufacturing factory. We hired a contractor for transport services so that our employees can commute from home to the factory and back home. Now the PF inspector asked us to deposit PF for the drivers of the hired buses. Are we liable to pay PF for bus drivers?
From India, Solan
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From India, Solan
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Dear Colleague, If you have a glance at the employee definition under the Employees Provident Fund & MP Act 1952, it includes "any person employed by or through a contractor." (Kindly refer below)
Employee Definition
2(f) "employee" means any person who is employed for wages in any kind of work, manual or otherwise, in or in connection with the work of [an establishment], and who gets his wages directly or indirectly from the employer, [and includes any person—
(i) employed by or through a contractor in or in connection with the work of the establishment;
Salary Limit for Coverage
The other aspect is the salary limit for coverage, which is currently Rs. 15,000 per month. In the case of fresh drivers employed for the first time, if they are above this limit, they are exempted. However, if their wages are within the prescribed limit (Rs. 15,000), they are liable to be covered under PF, and contributions are to be remitted by the contractor or by your organization.
In some cases, despite the above-mentioned salary limit, some drivers (whose wages are more than Rs. 15,000 per month) might already be members of the Provident Fund in their previous employment and might have an active UAN Number and PF Number. In that case, they are also to be covered, and you can limit the contributions to the extent of Rs. 15,000 per month.
Agreement with Contractor
In this case, you need to review the type of agreement entered into between the contractor and your factory and streamline that first. It is advisable that if the contractor does not have a PF Code number for his establishment, then insist on applying for and obtaining a code number so that it will be easy for the contractor to cover his employees under PF/EPS and collect proof of remittance from the contractor every month. Failing this system, and if the contractor does not have a separate PF Code number, then the Principal Employer (your factory) has to comply with PF for the drivers under the PF Code of your establishment. This is the settled process.
God Bless
Dr. P. Sivakumar
DrSIVAGLOBAL HR
Tamil Nadu
From India, Chennai
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321Employee Definition
2(f) "employee" means any person who is employed for wages in any kind of work, manual or otherwise, in or in connection with the work of [an establishment], and who gets his wages directly or indirectly from the employer, [and includes any person—
(i) employed by or through a contractor in or in connection with the work of the establishment;
Salary Limit for Coverage
The other aspect is the salary limit for coverage, which is currently Rs. 15,000 per month. In the case of fresh drivers employed for the first time, if they are above this limit, they are exempted. However, if their wages are within the prescribed limit (Rs. 15,000), they are liable to be covered under PF, and contributions are to be remitted by the contractor or by your organization.
In some cases, despite the above-mentioned salary limit, some drivers (whose wages are more than Rs. 15,000 per month) might already be members of the Provident Fund in their previous employment and might have an active UAN Number and PF Number. In that case, they are also to be covered, and you can limit the contributions to the extent of Rs. 15,000 per month.
Agreement with Contractor
In this case, you need to review the type of agreement entered into between the contractor and your factory and streamline that first. It is advisable that if the contractor does not have a PF Code number for his establishment, then insist on applying for and obtaining a code number so that it will be easy for the contractor to cover his employees under PF/EPS and collect proof of remittance from the contractor every month. Failing this system, and if the contractor does not have a separate PF Code number, then the Principal Employer (your factory) has to comply with PF for the drivers under the PF Code of your establishment. This is the settled process.
God Bless
Dr. P. Sivakumar
DrSIVAGLOBAL HR
Tamil Nadu
From India, Chennai
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Coverage of construction & contact workers under PF 22.1.2015.pdf
Coverage of Construction Labour under PF letter of 15 O-page-001.jpg