Contractual Staffing

Dear All,

I am working as an HR professional in a manufacturing firm and have certain queries about contractual staffing:

We have 15-20 workers on company contracts (not through a contractor but directly employed by us). Currently, we pay them fixed wages (well above the minimum wage) but they are not enrolled in the EPF scheme. Is it compulsory to enroll them in the EPF scheme just like we do for our employees on the payroll?

We are planning to hire a Security Officer on a contract basis for a year. Would that individual also need to be enrolled in the EPF scheme?

Regards,
Susan

Susan,

PF does not distinguish between regular employees and non-regular employees. If the total number of employees (including contract employees) is 20 or above, you should cover them under the Provident Fund.

Pon

Dear Susan,

Regardless of whether these contractual staff are on the payroll of the company or are paid wages, as the principal employer, it attracts EPF and ESIS deductions and contributions. There would be two EPF and ESIC sheets created, one for regular employee contributions and the other for contractual employee contributions.

On the front of hiring a security officer, I suggest you engage a proven security company for the same as it is a yearly renewable contract. These companies can also assist in assessing your security and vigilance requirements.

Once the company is covered under PF/ESI scheme, then any or every employee, either directly or indirectly, or through contract employment, is to be covered under the ESI and PF schemes.

Company contract means being deployed on a one-year contract employment or similar. It is better to deploy contract workers through a contractor instead of hiring them directly. Identify a security agency and ask them to provide a security officer to you so that it will be a contractual employment. I suggest having a security head on the company's payroll; failing to do so may result in lower commitment levels/ownership, leading to various issues for your company.

Regards - Kameswarao