Dear Jeet,
Let me assume that you are asking from the view of an establishment. In such a case-
1. If you engage 20 or more contract laborers, you may have to register your establishment under the Contract Labor Act. If you are working in Assam, Goa, Gujarat, and West Bengal, the applicable number is 10 or more contract workers.
2. If you are engaging the contract laborers through contractors and their strength is 20 or more, then you have to include those contractors in your RC and issue Form V (Certificate by Principal Employer) to them so that they can obtain a labor license.
3. But kindly ensure that you have obtained an RC under CLRA Act before engaging the contract workmen. Similarly, ensure that the contractors also obtain a labor license before engaging contract workmen, as engaging contract workmen without a valid RC or labor license will be treated as a sham contract, and the contract workmen will be considered your permanent workmen.
4. Ensure that the contract laborers are paid wages at par with your permanent employees if they are performing the same or similar work to that of permanent workmen.
5. Ensure that they are paid according to the specified minimum wages and within the specified timeline.
6. Ensure that welfare facilities like a canteen, restrooms, first aid facilities, latrines, and urinals are provided as per the statutory provisions of the Contract Labor Act by the contractors. If engaged directly, you may have to provide the same as per the statute.
7. Ensure that the contract laborers are covered under the ambit of PF. If the contractor has their own code, ensure that they remit the PF on time and submit the challan/ECR copies to you after remitting the PF.
8. Similarly, if your establishment is covered under the ESI Act, then the provision is extended to your contract laborers as well. You have to follow the same procedure as with PF.
9. If your contractors have not registered their company under PF/ESI, you may have to cover their contract workmen in your company's sub-code.
10. If your establishment is not covered under the ESI Act, ensure that a valid Employee Compensation policy is in place for all the contract workmen.
11. Even if the ESI Act is applicable but the workmen are earning wages in excess of Rs. 15,000 per month, you may have to take an EC policy. Alternatively, if you have a suitable policy that offers more benefits than an EC policy, you may prefer it, but you must inform the WC commissioner.
12. Ensure that necessary abstracts and notices under the Contract Labor Act, Child Labor Act, Maternity Benefit Act, Minimum Wages Act, Payment of Wages Act, Payment of Gratuity Act, NH/FH Act are displayed prominently in both English and local languages, readable by the engaged workmen.
13. Maintain records like the Muster Roll, Wage Register, PF Challan/ECR copy, and ESI Challan/CS copy of all the contract workmen in your safe custody. Periodically audit the contractor's documents to ensure compliance.
14. If you employ female workers, ensure there is no wage disparity. Adhere to the provisions under the Equal Remuneration Act and Maternity Benefit Act.
15. If you employ more than 10 female workers, ensure an Internal Complaints Committee is formed under the Sexual Harassment Act and follow the statutory provisions of the Act.
16. Remember that contract workmen are entitled to bonuses but from their immediate employer. Similarly, gratuity is also applicable to them. Ensure the contractors comply with the provisions of the PoB Act and PoG Act.
17. Lastly, if you employ more than five interstate workmen in your organization for contract work, you may have to register your establishment under The Inter-State Migrant Workmen Act and ensure your contractors also follow the same. They must obtain a license under the ISMW Act, for which you may have to issue Form VI (Certificate by Principal Employer).
I hope the above points provide you with a brief idea for engaging contract workmen in your organization.
P. Vathiraj
8220013422