PF Exclusion - Pf Contributions

Hi,
Can anyone give idea, how to exclude supply labours from PF contribution. As the labours don't work for long and the contractor is not ready to go for PF registration. So is there any way that our company may allow the contractor, without PF for his supplied labours.
Pls suggest.
Regards
ChittaBrat Dhal

Dear Mr Dhal,

With reference to your queries pls find below the PF applicability and eligibility for PF membership :

Applicability i) Every establishment which is a factory engaged in any industry specified in Schedule 1 and in which 20 or more persons are employed and

ii) Any other establishment employing 20 or more persons which entral Government may, by notification, specify in this behalf.(Infancy period of 3 years has been withdrawn by ordinance w.e.f.22-9-97)

iii) any establishment employing even less than 20 persons can becovered voluntarily u/s 1(4) of the Act.

PF Eligibilty :

Any person who is employed for work of an establishment or employed through contractor in or in connection with the work of an establishment.

Therefore the contractor must have to provide the minimum statutory benefits i.e. PF, ESI etc which are mandate by labour law. Infact if the contractor is not providing these minimum statutory benefits to the contract employees then both the employer and contrctor would be in trouble during the inspection by the concrn authority.

Regards

Sidharth Sahu

- Applicability is rightly explained by Mr. Sidharth.
In your case deduct PF component of contract labours i.e Employee + employer contribution + admin. charges from the bills of labour contractor on the wages paid ( Basic + DA ) & deposit it to PF Authorities under Principal Employer Code.
In case of default in PF payment the principal employer will be held responsible & may imposed penalty/damages at the following rate :
Less than 2 Months - 17 %
2 to 4 Months - 22%
4 to 6 Months - 27%
6 & above months - 37%
Thanks & Regards,
Nishi

Hi
Any amount paid to wards any services of the establishment / organisation / factory, even for an Hr or a day it tent amounts to PF and ESI deductions, whether they are on NMR, Regular / Contract labour. All other conditions are explained fine by above friends.
Mohan Rao
Manager HR

Hi Nishi,
The PF amount cant be remitted through principal employes's code for the contract employees. Since the principal employer have to mantain certain register w.r.t. to comply with the PF authority. Second thing thr contract employees salary cant be processed on the same payroll with the regular employees. So again it will affect the a/c books of the company. Infact the principal employer have to mantain some relevant registers onbehalf of contract employees and it is the prime responsibilty of the principal employer that whether the contractor is providing the minimum statutory benefits.
Regards
Sidharth

Thanks Sidharth,
But in my case, the contractors are not ready to abide any PF compliance. To deposit the PF amount of supply labours we need to use the name of the Contractor, though we will use our company's PF code. For that also the conttractors are not ready. So we are planing to appoint new contractor, who will abide by PF laws and all.

Dear Nishi,
Contract employees cant claim for any kind of statutory benefit from principal employer. Its the duty of principal employer to audit the compliance made by contractor. Noway contract employees salary will be reflect on the principal employer's ledger. Contension to your view can you pls let me know after the remittance of the PF for contract employees through the PF code of principal employer, on which register the nomination of contract employees will be reflect. Since you cant mantain two Form-9 i.e. One for regular employees and one for contract employees. Infact contractor cant mantain the same. Since the remittance made through the employer's code.
Regards
Sidharth