EPF Contribution On Labour Charges

Dear Citehr Members,
Kindly clarify me whether we have to pay EPF contribution on labour charges, which section of EPF deals with this matter and provide me any judgement copy related to this matter.
Thanks in advance
Kiran_alittleray

By labour charges, if you mean wages paid to casual labour engaged during the course of business, you are expected to pay contributions, both ESI and EPF, on the same. This is because, employee means any person whether on roll or not employed for the work connected with the operations of the company. At the same time, labour engaged for work not connected with the work of the company, say, construction of compound wall etc, may be excluded. On this, different views have been expressed by authorities and courts from time to time.
In my opinion ESI is more strict in such type of compliance and EPFO use to drop it.
Regards,
Madhu.T.K

Dear Mr. Madhu.T.K,
Thanks for the valuable suggestion. In our company we have given some labour charges. The Inspector is demanding us to pay EPF contribution on that amount, provided that the contractor has given us the salary register in that all most all employees have drawn their salary above 6500/-. But the Department is not considering it, what will be the remedy for this.

If the workers in reference are engaged through a contractor, you have to produce the contractor before the EPF at the time of 7A enquiry and ask him to produce his wage register and clarify that all are out of PF coverage. The authority will examine it and if the basic salaries are above Rs 6500 right when they were employed by the contractor or when the Act became applicable to the contractor, they will be excluded and otherwise, if the total salaries are more than Rs 6500 whereas the basic salaries remain less than that, naturally, they will come under the PF.
Regards,
Madhu.T.K

Dear Kiran,
As per madhu advice he is right kindly clear us there Basic salary amount.
if Basic salary amount 6500 above then u can take form11 filled form from contractor employees also.
some more things u can check also
a)Go through work order copy too and see PF part will be deposited on 6500 or 12% of Basic.
b)if the contractor having own Pf code then there will be no problem to your organisation all the liability will go to your contractor.
Ratikanta Rath

Dear Madhu,
looking at the above case of Kiran i m having a doubt like Suppose a Principal Employer deducting 12% of PF amount from Employee basic salary above 6500. (example, pf= 7500*12%)
My question if a Contractor will engage and there labour PF amount is deposited in Company code "is it possible company can restrict the deduction of PF contribution of contractor labour on 12 % of 6500." AS contractor don't want to deduct PF above Basic salary of 6500
Ratikanta Rath

Since only employer's share is a cost to company, you can restrict the contributions to 12% of Rs 6500, ie, Rs 780 per month per employee.
Regards,
Madhu.T.K