Subcontractor PF

Dear All

I have an sub contractor who has not having PF code now my question is how to deduct PF of their employees.

Can we deduct their PF in A/c of Principle employer?

But my question is that the Employee & Employer relation is not with Sub contractor the how can we deduct PF???

Kindly help me

Sudip Sahu
9227802836

As a principal employer, you are responsible for PF coverage. If they don't have PF code, ask them to obtain the same. you have to give Form V. Otherwise, you have to deduct the PF from their bills and deposit to PF authorities as you will be held responsible.
Regards
R.Ponraj

Dear sudip,

now heres a tricky game u ve to play. by the way what type of orgzn is yours. PSU/Pvt.??

well what ever. that u have to make them pay PF is true. but never ever try to get it paid through your orgzn's PF code. that will be a blunder. it also depends on the IR and power of Union at your place. the best thing you can do is that force them to pay through the PF code of the contractor. Dont issue Form V to the sub-contractor. this will creat problem in future. what problem?? we may discuss later. Issue form V only to the contractor to avoid complicacies and IR issues. It also depends on the agreement with the P Employer and the contractor. however PF is a very touchy issue. think every pros and cons before you take any step in the field. you are there to save ur orgz. and not for any philanthropy. What it seems good today may be bad tomorrow. Be harsh to your contractor and avoid dealings with sub-contractors. never give gate pass to the workers of the sub-contractor unless the Gate Pass application bears the declaration/ certification of the main contractor. Force contractor to take care of the sub-contractor.

I hope u are getting me ... u may call me at 9434139276 (west bengal)

regards,

Shafiq

Hi Shafiq,
Nice explaination. But in one case suppose contractor didn't have PF No. also he did not deduct PF of his workers. when P employer is strict then he says that he has applied for the same. in mean time PF Inspection held in the organization and find that you have not deducted the PF of your contract employee. then what will be your reply.
Regards,
Avinash K.

i am working in a construction company. this is my first job with no practical experience in pf etc. and my senior just resigned. my query is on the same line.
we take labour from the contractors and we deduct and submit the pf for them on our pf code/account. is it advisable to do so?
or should we pay the pf for the labor through the pf code/account of the contractor from whom we are hiring the labor?
please let me know.
i will also like to know what problems may arise due to the practice we are following.

dear akatrap/ Pradyumna Kumar Atri

when a contractor is engaged he signs an agreement. see whethr they are allowd to employ sub-contractor. Once contractor is fixed you may give FORM V to them. if they do not have PF number how did you allow him to fill the tender and compete in the bid. contractor having no PF number should not be allowd to fill up the tender OR before placing Order ensure that he has the PF code/ if not then either force him to take a code under any other big vendor/or get his new code/ or throw him out. Well its not so easy the way i am saying. but we have to be sure that some how the contractor gets a PF code. But never be so good the deduct the PFs of the workers from P. Employer's code. you may issue form V to 1st level sub-contr under certification of the main contractor but never below that. always involve main contractor in all the dealings.

Well Akatrap,

in your case better call that PF officer at a corner and offer him a pkt of Wills navy cut or you can take him to some star resturents and order a good lunch.

well see dear, dont issue any get pass to the workers of the contractor/ sub contr. unless they get a PF code. Force the contracotr to get WC Insurence/ESi done. without these dont alow the workers to enter. creat pressure on the contrc. to start the job.. you know what I mean. Now sometimes contractor has the PF code but cannot allot PF number. say them to allot any by-number and write at the gatepass in PF column 'A/F". hope you are getting me. hope this will help you in some way. Never forget union/ IR issues embedded in all these.

Dear Pradyumna

you work under any guidence. its not easy to guide you on net. work under your boss. he will definitely help you. afterall u are new. ur boss also knows that.

ok guys !!

regards,

Shafiq

Looking to your problem, I offer the following suggestions:
1. Since your sub-contractor has no PF code, the compliance has to be ensured by you, particularly if you are making payment payment to the sub-conttor directly. If you are not making payment to him, better way would be to insist on the contractor to account for PF remittance of the sub-contractor too. Do your contract with the contractor allow the work to be off loaded to another party?
2. In future, do not allow any contractor or subcontractor without PF no.
3. Form V is needed for Labour license. It has nothing to do with PF registration.
Regards KK

dear shafiq,
my senior has been very secretive about all the stuff abt esi and pf and recently he has resigned and there is no other senior person in hr department. now myself and a lady who looks solely into recruitment are there and she knows nothing abt hr/labour laws, she has enough knowledge of recruitment to do her job.
so there is no one at my work place to guide me.

Dear Mr Sudeep Sahu

I just want to sum up the reply of all the other senior members and would advise you to take following steps:

1. Whenever you ask a question like this, please indicate the type of company you represent; it helps to guide clearly.

2. Please know that there is principal employer (your company), contractor and sub contractor in your business.

3. When you say sub contractor, it says, you have engaged a contractor and the contractor is engaging another contractor - is it so?

4. If you are engaging a contractor, invariably, the contractor must have PF and ESI codes. Otherwise, do not engage such people and put yourself into problem

5. If you have already engaged a contractor long back and cannot get rid off from him, you may do the following:-

a) Instruct the contractor to obtain PF code (if he has 20 persons under his roll and if it is less than 20, voluntarily also

he can opt for it)

b) Pay the contractor including Employers' PF margin and ask him to deduct from the employees' wages also and remit

5. As one of our member said, Form V is issued to contractor to obtain License from Labour Dept

6. In case there is no PF code with the contractor, it is not safe to keep such contractors with you. Suppose if you cannot get rid off from him at this stage, there is no harm if you deduct PF and pay it. But you have to allot PF number through your PF code and maintain registers, settle PF if they leave, etc. It will be an added work to you. Hence, it is better to ask contractor to obtain PF code.

7. If contractor is engaging another contractor and allows them to work in your premises, then he is called the sub-contractor. Here be careful that you do not engage them directly. It is the contractor's head ache and the sub-contractor has no business directly with you. He has to come through the 1st contractor only. For PF and ESI purposes also, he has to come through contractor only. It is not your head ache. Ask the contractor to take all these people under his rolls only.

Ultimately, whether it is contractor or your company, PF and ESI authorities will ask only you i.e. Principal Employer and you have to comply. Hence, it is always advisable to engage a registered contractor who has ESI code, PF code,

Regards

K.Ramachandra

Bangalore

Hi Shafiq,
Nice explaination dear but I have 1 question. Suppose our company has to get a specialised job of a company/contractor because they are specialised in that area and they are having no PF CODE because the number of employees is less than 20 of the company/contractor but they need some unskilled workers for our company's order but they are reluctant to take PF Code otherwise they will not perform our job. But ultimately job is imporatant for our company. So in that case what procedure should we take so that we can get our job done by that specialised contractor and simultenously PF Act may not be violated.
regards.
Jawed Alam.
WEST BENGAL.