PF & ESIC For The Temp Staff

Dear Colleagues,
Is it necessary to deduct the PF & ESIC of the temp staff.
For eg- We have some labours at our ware house & monthly we are paying them Rs 4000/- (As per the min wages act) and over time charges.
Is it necessary to deduct their PF & ESIC from their salary in Delhi?
Regards
Himanshu

Dear PL go THR IT

Siddhesh

CONTRACT LABOUR

(REGULATION & ABOLITION) ACT, 1970

OBJECT

• To regulate employment of contract labour

• To provide for its abolition in certain cases

CONTRACT LABOR

(REGULATION & ABOLITION) ACT, 1970

Applicability - Sec 1

• Every Establishment in which 20 or more workmen are employed or were employed on any day of the preceding 12 months as contract labour.

• To every contractor who employs or who employed on any day of the preceding 12 months 20 or more workmen.

• Does not apply to Establishments where work only of an intermittent or casual nature is performed.

• <120 days in preceding 12 months or if it is of a seasonal character I.e. <

60 days in a year.

CONTRACT LABOUR

(REGULATION & ABOLITION) ACT, 1970

Establishment

Means –

• Any office or department of the Government or a local authority; or

• Any place where any industry, trade, business, manufacture or occupation is carried on.

CONTRACT LABOR

(REGULATION & ABOLITION) ACT, 1970

Registration of Establishment - Sec 7

• Principal employer employing 20 or more workmen through the contractor.

• Rule 17 Form I

• Certificate of Registration in Form II

• Change in particulars of Regn to be notified within 15 days with reasons for change.

• Incomplete form – amendment to be carried within 15 days from receipt of intimation.

CONTRACT LABOUR

(REGULATION & ABOLITION) ACT, 1970

LICENSING OF CONTRACTORS

• No contractors to undertake or execute work through CL except under and in accordance with a license issued under the Act.

• Form IV – Rules 21 to 23

• Certificate from Principal employer-Form V

• Conditions – hours of work, wages and other essential amenities.

CONTRACT LABOR

(REGULATION & ABOLITION) ACT, 1970

Terms and conditions of license

• License shall be in Form VI

• Non transferable

• Contract labour should not exceed, on any day, maximum specified in the license.

• Wages, hours of work and other conditions of service.

• Notify any change in no. of workmen or conditions of service.

CONTRACT LABOUR

(REGULATION & ABOLITION) ACT, 1970

Terms and conditions of license

• Number of employees not to exceed maximum specified in the license.

• Wages and conditions of service as per Rule 25 IV and V.

• Room for use of children under six years where 20 or more women are ordinarily employed.

• Intimation in Form VI-A the date of commencement and completion of each contract within 7 days of commencement and completion.

CONTRACT LABOUR

(REGULATION & ABOLITION) ACT, 1970

Validity of license

• Every license shall remain in force up to 31st December of the year for which the license is granted or renewed.

• Application for renewal to be made in Form VII not less than 60 days before expiry.

• Deemed to have been renewed until the date when renewal is granted or refused.

CONTRACT LABOUR (REGULATION & ABOLITION)ACT, 1970

Liability of Principal Employer - Sec – 20

• If the contractor does not provide amenities under S 16 to 19 within the time prescribed such amenities shall be provided by the principal employer.

• Expenses incurred by principal employer in providing these amenities may be recovered from the contractor by deductions or as a debt payable.

CONTRACT LABOUR (REGULATION & ABOLITION) ACT, 1970

Liability of Principal Employer - Sec – 20

• Where the contractor fails to pay wages within the time prescribed or makes short payment, then the principal employer to pay wages in full or unpaid balance due.

• Principal employer can recover the amount from contractor by deductions or as a debt payable.

CONTRACT LABOR

(REGULATION & ABOLITION) ACT, 1970

Welfare and health measures

• S.16 r/w Rule 40

• Where 100 or more CL are employed.

• Work likely to continue for 6 months.

• Contractor shall provide canteen within 60 days.

CONTRACT LABOUR

(REGULATION & ABOLITION)ACT, 1970

Canteen

• Where PE has a canteen u/s 46 of Factories Act, arrangements made with

PE by the Contractor will be considered as due compliance.

• Where contractor fails to provide a canteen, the PE shall provide within 60 days of the expiry of the time provided to the contractor.

CONTRACT LABOUR

(REGULATION & ABOLITION) ACT, 1970

Rest Rooms S.17

• Rule 39

• Where CL is required to halt at night.

• Work to continue for 3 months or more

• Contractor to provide and maintain rest rooms within 30 days.

• As specified by Commissioner of Labour.

• Sufficiently lighted and ventilated and maintained in a clean and comfortable condition.

CONTRACT LABOR

(REGULATION & ABOLITION) ACT, 1970

Rest Rooms

• Where PE is required to provide rest rooms under the Factories Act any arrangements made by Contractor with PE for use of rest rooms by CL

will be due compliance.

• If Contractor fails, the PE to provide such amenity within 30 days of the expiry of the period laid down in the Rule.

CONTRACT LABOUR

(REGULATION & ABOLITION) ACT, 1970

Latrines and Urinals

• Contractor shall provide –

• In every establishment coming within the scope of the Act

• 1 latrine for every 20 persons upto the first 100 and 1 for every 30 thereafter.

• Partitioned to secure privacy.

• Proper identification – Men – Women

CONTRACT LABOUR

(REGULATION & ABOLITION)ACT, 1970

Latrines and Urinals

• 1 urinal for male workers upto 50

• 1 urinal for female workers upto 50

• Adequately lighted and maintained in good sanitary condition at all times.

• Comply with requirements of public health authorities.

CONTRACT LABOUR

(REGULATION & ABOLITION)ACT, 1970

Latrines and Urinals

• Where PE under Factories Act has provided latrines n urinals arrangements by contractor with PE for use of the same by his workmen shall due compliance.

• If the contractor fails to provide within 60 days, the PE to comply within

30 days of the expiry of 60 days given to contractor.

CONTRACT LABOR

(REGULATION & ABOLITION)ACT, 1970

Washing Facilities

• S. 18 r/w Rule 42

• Contractor to provide –

• Adequate and suitable facilities for washing

• Adequate number of buckets and tumblers or mugs and water supply @ 20 litres a day for each workman employed.

• Within 30 days – on failure by PE within 60 days from the expiry of 30 days.

CONTRACT LABOUR

(REGULATION & ABOLITION)ACT, 1970

First Aid Facilities

• S. 19 r/w Rule 44

• Not less than 1 box for every 150-contract labour or part thereof.

• Different provisions for contents for establishments employing <50 and >

50.

• Nothing except the prescribed contents shall be kept in the First Aid Box.

CONTRACT LABOUR

(REGULATION & ABOLITION) ACT, 1970

First Aid Facilities

• Box to be kept in charge of a responsible person.

• Who shall be readily available during working hours.

• Where the No of CL is 150 or more the person in charge shall be a trained

person in First Aid treatment.

CONTRACT LABOUR

(REGULATION & ABOLITION) ACT, 1970

Wages S.21 Rule 45-54 Ch VI

• Rules 45 to 51will not apply where Payment of Wages or Minimum Wages

Act applies.

• Contractor to fix wage period.

• Not to exceed one month.

• To be paid within 3 days from the end of the wage period where wage period is 1 week or a fortnight.

• In other cases before 7th or 10th day depending on No of workers (1000).

CONTRACT LABOUR

(REGULATION & ABOLITION) ACT, 1970

Wages

• In case of termination earned wages to be paid before the expiry of the day

succeeding the one on which employment is terminated.

• Payment of wages to be made on a working day, at the work site and

during working hrs

• Where work is completed before the wage period, payment to be made

within 48 hours of last working day.

CONTRACT LABOUR

(REGULATION & ABOLITION) ACT, 1970

Wages

• To be paid directly to worker or to other person authorised by him in this

behalf.

• Wages to be paid in coin or currency or both.

• To be paid without any deductions except those permissible under the

Payment of Wages Act.

? Notice showing wage period, place and time of disbursement shall be displayed at the place of work and copy to be sent to PE under acknowledgement.

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CONTRACT LABOR

(REGULATION & ABOLITION) ACT, 1970

Wages

• Duty of contractor to disburse wages in the presence of the authorised

representative of Principal Employer.

• PE to nominate a rep to be present at the time of disbursement of wages by

contractor.

• Rep shall certify the amounts pd as wages.

CONTRACT LABOUR

(REGULATION & ABOLITION)ACT, 1970

Wages

• Rep shall affix his initials against each entry and record a certificate……

• “Certified that the amount shown in column No ___has been paid to the

workman concerned in my presence”.

• Entries denoting time, place and payments made shall be made in the

register simultaneously as the payments are made.

CONTRACT LABOUR

(REGULATION & ABOLITION) ACT, 1970

Registers, Records and Notices

• Following registers under PW Act or MW Act shall be deemed to

maintained under the CL Act under Rule 59(1):

l Muster Roll, Wage Register, Register of deductions, Register of

overtime, Register of fines, Register of Advances.

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CONTRACT LABOUR

(REGULATION & ABOLITION) ACT, 1970

Registers, Records and Notices

• Where 59(1) does not apply –

• Contractor to maintain –

• Muster Roll-cum-Wage Register under Rule 27(1) of MW Rules.

• Attendance card-cum-Wage slip under Rule 27(2) of MW Rules.

• Signature or thumb impression of every worker on the wage register be obtained and entries to be authenticated by the contractor.

CONTRACT LABOUR

(REGULATION & ABOLITION)ACT, 1970

Registers…..Rule 61

• All Registers and Records shall be kept at an office or the nearest convenient bldg within the precincts of the work place or at a place within a radius of 3 kms.

• Maintained legibly in English, Hindi or Marathi.

• To be preserved in original for a period of 3 calendar years from the date of last entry.

• To be produced on demand before Inspector or other authority.

CONTRACT LABOUR

(REGULATION & ABOLITION)ACT, 1970

Notices Rule 62

• Notices showing the wages, hours of work, wage periods, dates of payment, names and addresses of inspectors having jurisdiction, the PE or the Contractor shall display date of payment of unpaid wages in English, Hindi or Marathi in conspicuous places at the Est and the worksite as the case may be.

CONTRACT LABOUR

(REGULATION & ABOLITION)ACT, 1970

Registers - Rule 55

• Register in form VIII by Principal Employer.

• Employment card in form X

CONTRACT LABOUR

(REGULATION & ABOLITION)ACT, 1970

Returns Rule 63

• Form XXI by Principal employer by 15th Feb.

CONTRACT LABOR

(REGULATION & ABOLITION)ACT, 1970

Abstract

• Every Contractor shall display an Abstract of the Act and the Commissioner of Labour may approve Rules in English, in Hindi or in Marathi in such Form as.

CONTRACT LABOR

(REGULATION & ABOLITION) ACT, 1970

Prohibition of Employment of Contract Labour - Sec – 10

• By Appropriate Government through notification.

CONTRACT LABOUR

(REGULATION & ABOLITION) ACT, 1970

Criteria for abolition



• By Appropriate Government through notification.

CONTRACT LABOUR

( REGULATION & ABOLITION)ACT, 1970

Consequences on abolition

• Contractor gets eliminated and so does the contract.

• Contract Labour does not automatically become direct employees of Principal Employer.

• Contract Labour gets preference for employment with Principal Employer subject to their meeting the employment requirements.

• The displaced Contract Labour can still raise an I.d claiming that contract was sham and they were always the direct employees of the Principal Employer.

• Contract Labour cannot be employed in such processes thereafter.

Dear ,
It is mandatory to become member of pF & ESI scheme for an employee from the 1st day of his joining inspite of he be a permanent , temporary , contract or fixed term employee.
Non deduction of PF will make your organisation to pay huge penality and if deducted and not paid than it will be a criminal cause.
kindly take care that we should not allow non compliance under PF & Miscelleanous provisions act 1962.
Bosses will always resist to pay PF & ESI for temporary staff but to make them understand with future complication and consequences is the work of HR department.
Regards
Abhijeet Sawant

There is no concept of permanent/regular/temporary/casual employees so far as ESIC is concerned. Only trainees under the standing orders of the company are excluded. Even these trainees will be brought into the ESIC net as soon as the bill to amend the ESIC Act, which is pending in Parliament, is passed during the winter session of the parliament.
S. Krishnamoorthy

Dear Mr Himanshu,
Well explained by krishnamoorthy & Abhijeet & detial explanation by Mr.Siddhesh reg contrct labor, plz clearify reg creeche ot be provide as u hav mentioned 20/women emplyee, as thing it 30 woman emplyee..
Himanshu...the activity u are performing is against the rule, for that u or ur employer may held for procecusion. so plz discus this matter with ur boss n reactify it. and i thing the trainees are also applicable for esi, pf & other statutory, but apprentice is not covered..
Regards,
Ramnath

Dear Himanshu,
Please clarify whether those employees are your payroll or on some contractor's pay roll. But, in both cases they have get benefit of ESIC and PF.
1) If on payroll of your company than u have to deduct the PF & ESIC amount and deposit in respective account under your codes.
2) If on contractor's payroll than you cannot deduct the PF and ESIC amount but instruct the contractor to deduct it and make sure that he pay in to the respective accounts under his code.
Regards,
Sandeep Kulkarni

Dear Mr.Himanshu,

The Temp staff should be paid PF & ESI as per the acts given below:

(a)In accordance with The Employees’ Provident Funds and Miscellaneous Provisions Act. 1952, Section 6, The contribution which shall be paid by the employer to the Fund shall be (12%) of the basic wages, (Dearness allowance and retaining allowance (if any)) for the time being payable to each of the employees [(whether employed by him directly or by through a contractor)] and employee’s contribution shall be equal to the contribution payable by the employer in respect of him and may, (12% of his basic wages, Dearness allowance and retaining allowance (if any), subject to the condition that the employer shall not be under an obligation to pay any contribution over and above his contribution payable under this section)

(b)In accordance with Employee’s State Insurance (Central) Rules, 1950, Chapter VI, Section 51, the amount of contribution for a wage period shall be in respect of (a) employer’s contribution, a sum (rounded to the next higher multiple of five paise) equal to 4.75% of the wages payable to an employee; and (b) employee’s contribution, a sum (rounded to the next higher multiple of five paise) equal to 1.75% of the wages payable to an employee.

If the Salary is more than Rs.6500, then PF is not compulsory and if the salary is more than Rs.10000, then ESI is not required.

Hope the details will be useful to you.

Thanks
K.Veeramani

Dear Hipant
Nowadays, the authorities insisting us to pay PF/ESIC for the Painters and Construction Workers, who have done 2 days duty. So it is firmly necessary for you to pay PF for your temporary employees ie casual employees.

Hi all
Any monetary payments made towards the services rendered by any person in an industry which is covered by ESIC & EPF Acts, even for an Hr, the said payment attracts to deduction of EPF And ESIC Contributions, this is what the Act speaks.
Mohan Rao
Manager HR

Dear Ramnath
Temporary comes under the ESIC & PF if they help in profit of the Organisation.
Pls update your knowledge about the Trainee & Apparentice, both are not come under the coverage of either ESIC & PF.
Regds
Ashwini Kumar