PF & ESI Liability - deducting TDS on contractor under 194c head?

We are a manufacturer of "Rakhi." We make 90% of the manufacturing work through contractors with job cards outside of the company. However, we deduct TDS on the contractor under the 194C head. Are we liable to pay PF and ESI for the laborers of these contractors?

If the establishment is covered under ESIC/EPF, then you have to select ESIC/EPF covered establishments for job work. Otherwise, the department will treat them as your workers.

But they not only work for our company, they work for different companies as well. Are we liable to pay them?

Dear Shreerakhi,

You need to comply in the following manner:

1) Your registration under the factory.

2) Your registration as the Principal Employer under the Contract Labour Regulation and Abolition Act.

3) Your PF code if you engage more than 20 employees.

4) Your ESIC code if you employ more than 10 employees.

5) The contractor should obtain a labor license.

6) You should contribute towards PF and ESIC for your direct employees.

7) Your contractor should pay wages, contribute PF and ESIC for his laborers working for your establishment.

8) Either you need to fix the piece rate calculating all financial burdens (including PF and ESIC) or you can reimburse wage, PF, and ESIC for the actual days contractors' laborers have worked for your establishment.

9) You should ensure the contractor pays overtime, leave wages, and bonus as per applicability, and files the required returns and maintains registers.

Shailesh Parikh
99 98 97 10 65
Vadodara

But they are not a company; they are individual persons. They created a labor bill against his job card. Our company debits labor charges against this bill, and after deducting TDS, we clear this bill. Is this process incorrect?