I would like your guidance on the following issue.
we have taken one housekeeper (unskilled) labour for our office in Indore (MP) thru labour contractor. Contractor is taking from us Basic (Ras. 2476/-) + 150 Uniform allowance + 13.61% PF + 4.75% + 8.33% Bonus + Service tax and their service charges. They are taking bonus money from us on monthly basis however it is paid to employee once in a year in October. Now the first bill from contractor has been received. They have submitted a copy PF and ESIC challan for the whole group of employees. and also given a declaration that the said amount (i.e. Basic 2476 - 12% PF - 1.75% ESI) has been paid to the employee.
As per the law, he should submit minimum following along with bill:
1. payment sheet with employee's signature
2. attendance sheet
3. PF challan individual
4. ESIC chilean individual
I asked them to submit employees PFUI and ESIC reg no. but they told me that since we have taken only one employee hence separate registration is not done. All of their employees are registered under one name and no.
What they are paying to their employee is actually very less. But i requested them to complete the formalities and submit all the necessary papers.
Kindly advise me on this issue.
best regards,
Priyanka
From India, Mumbai
1we have taken one housekeeper (unskilled) labour for our office in Indore (MP) thru labour contractor. Contractor is taking from us Basic (Ras. 2476/-) + 150 Uniform allowance + 13.61% PF + 4.75% + 8.33% Bonus + Service tax and their service charges. They are taking bonus money from us on monthly basis however it is paid to employee once in a year in October. Now the first bill from contractor has been received. They have submitted a copy PF and ESIC challan for the whole group of employees. and also given a declaration that the said amount (i.e. Basic 2476 - 12% PF - 1.75% ESI) has been paid to the employee.
As per the law, he should submit minimum following along with bill:
1. payment sheet with employee's signature
2. attendance sheet
3. PF challan individual
4. ESIC chilean individual
I asked them to submit employees PFUI and ESIC reg no. but they told me that since we have taken only one employee hence separate registration is not done. All of their employees are registered under one name and no.
What they are paying to their employee is actually very less. But i requested them to complete the formalities and submit all the necessary papers.
Kindly advise me on this issue.
best regards,
Priyanka
From India, Mumbai
Priyanka,
your contractor's claim is right. It is not possible for him to make separate PF and ESIC registration for each and every client of his. Now keeping that aside I can give you tips as what you can ask from him to check his compliances.
1. Payment Sheet with employees signature
This proof is valid only in case of Cash Payment. In case of bank credit(if applicable), you can ask the employee to give his bank mini statement. you can do that as a random check once in 3 months or so.
2.Attendance sheet
yes you can ask for the same
3.PF Challan individual
This is not possible, rather you can ask him to give
photocopy of FORM 9 with ack seal from PF authority, where your contract employee's name reflects. Form 9 is submitted during the time of enrollment of an employee under the PF scheme. Also you can ask him to submit the Form 5. Every month along with the bill you can accept the consolidated challan of the previous month. Also ask him to submit PF annual returns for the contract employee deputed to you.
4.ESIC challan indivi
This is again not possible, alternatively you can ask for the following
a. The photocopy of the temporary ESIC card which is normally given within 3 days of his joining
b. after 3 months ask him to submit the photocopy of the ESIC card which is given to the employee
c. Also make the contractor to submit the ESIC halfyearly returns. If he has many employees in his role, then let him attach the sheet where your employee's name reflects.
d. by default ask him to submit the consolidated challan of ESIC amt remittance of the previous month with the current bill
Regarding bonus it is better that you accumulate in your A/c rather than accumulating in your contractors account. Normally what happens is that at the level of House keepers there will be heavy attrition. when the new person joins, he will get bonus only from the date of his joining and therefore the contractor enjoys the amount what he has accrued in the previous employees account.
Hence you can advice your contractor not to charge bonus on monthly basis, during the time of disbursement let him calculate and tell the amount to be disbursed and the same can be released from your companies account for which you have already allocated in your P&L
hope I have answered all the queries, still if you have doubt pls write back
Thanks and Regards
Dinesh
your contractor's claim is right. It is not possible for him to make separate PF and ESIC registration for each and every client of his. Now keeping that aside I can give you tips as what you can ask from him to check his compliances.
1. Payment Sheet with employees signature
This proof is valid only in case of Cash Payment. In case of bank credit(if applicable), you can ask the employee to give his bank mini statement. you can do that as a random check once in 3 months or so.
2.Attendance sheet
yes you can ask for the same
3.PF Challan individual
This is not possible, rather you can ask him to give
photocopy of FORM 9 with ack seal from PF authority, where your contract employee's name reflects. Form 9 is submitted during the time of enrollment of an employee under the PF scheme. Also you can ask him to submit the Form 5. Every month along with the bill you can accept the consolidated challan of the previous month. Also ask him to submit PF annual returns for the contract employee deputed to you.
4.ESIC challan indivi
This is again not possible, alternatively you can ask for the following
a. The photocopy of the temporary ESIC card which is normally given within 3 days of his joining
b. after 3 months ask him to submit the photocopy of the ESIC card which is given to the employee
c. Also make the contractor to submit the ESIC halfyearly returns. If he has many employees in his role, then let him attach the sheet where your employee's name reflects.
d. by default ask him to submit the consolidated challan of ESIC amt remittance of the previous month with the current bill
Regarding bonus it is better that you accumulate in your A/c rather than accumulating in your contractors account. Normally what happens is that at the level of House keepers there will be heavy attrition. when the new person joins, he will get bonus only from the date of his joining and therefore the contractor enjoys the amount what he has accrued in the previous employees account.
Hence you can advice your contractor not to charge bonus on monthly basis, during the time of disbursement let him calculate and tell the amount to be disbursed and the same can be released from your companies account for which you have already allocated in your P&L
hope I have answered all the queries, still if you have doubt pls write back
Thanks and Regards
Dinesh
Hi,
I do agree with Dinesh.
You can also advice the agency to submit all the payment proofs at the time of collecting the cheque ( montly bill). Payment proofs of all statutory payments of last month needs to be submited ,then only the current month bill would be cleared.
Regards
Chakradhar.
From India, Hyderabad
I do agree with Dinesh.
You can also advice the agency to submit all the payment proofs at the time of collecting the cheque ( montly bill). Payment proofs of all statutory payments of last month needs to be submited ,then only the current month bill would be cleared.
Regards
Chakradhar.
From India, Hyderabad
Mr Dinesh s comments are correct with 1 minor amendment...the contractor cannot charge u bonus payment at 8.33%...the definition of wages does not include bonus. bonus as per the payment of bonus act is payable on the profits generated by an establishment & in case of no profits minimum bonus is payable...but this liability is not of the principal employer but is payable independently by the contractor on his p/l a/c.....ie on the service charges levied by him on you....the contract labour act does not make the principal employer liable for payment of bonus of the contractors employees...further even if the principal employer does agree or want to pay the contractors employees bonus thru the contractor , this is payable by nov, ie within 8 months of closing of accounting year....so u can ask for the attendance sheet of employees who were in the employment of the contractor in the accounting year & calculate & pay pro rata bonus ...
Regards
From India, Pune
Regards
From India, Pune
Dear Priyanka
The Contractor needs to pay wages as per the Minimum Wages Act. Any violation to this would make the principal employer liable in law to pay wages. Whenever the contractor pays wages it is neccessary that one of the authorised representative of the employer is present and the representative needs to sign on the muster that the wages are paid as per the minimum wages. With regard to the ESIC and Pf Challans, you can take a letter from the Contractor that he is registered under the Pf and ESIC with a reference of the PF and ESIC Code numbers. Also insist on the 6 monthly returns of employees to be filed by the contractor to ensure that he has deposited the contributions. in case of any querries you may write to me on
Vincent
Dear Priyanka,
I have gone through your quarry.
Please ensure the following;
1) The Principal employer (Your company) is registered with local Labour Department for enganing contract workmen ?
2) The Labour supply contractor , Is he registered as a contractor with Labour department ?
3) Weather the contractor has registered with PF / ESI authorities ?
4) If the contractor is not having any PF / ESI number, as a principal employer you have to obtain a separate code number for all the contractors engaged in your organisation. and advised them to remitte all the PF / ESI contributions in that. It is very safe guard for organisations engaged contractors workmen.
5) If need any clarifications please visit the website of PF / ESI organisations.
Regards,
:)
PBS KUMAR
From India, Kakinada
I have gone through your quarry.
Please ensure the following;
1) The Principal employer (Your company) is registered with local Labour Department for enganing contract workmen ?
2) The Labour supply contractor , Is he registered as a contractor with Labour department ?
3) Weather the contractor has registered with PF / ESI authorities ?
4) If the contractor is not having any PF / ESI number, as a principal employer you have to obtain a separate code number for all the contractors engaged in your organisation. and advised them to remitte all the PF / ESI contributions in that. It is very safe guard for organisations engaged contractors workmen.
5) If need any clarifications please visit the website of PF / ESI organisations.
Regards,
:)
PBS KUMAR
From India, Kakinada
Hi Friend,
What u want to know is not clear. But have some look over below suggestions:
1. Bonus can not be a part of wages. Therefor ask him to withdraw this part of amount.
2. It can not be possible to covered all the employee under one PF and ESI registration. It might be seperate for each employee but the employer registration can be single.
3. You may ask him for Form # 05 and form # 01 respectively for PF & ESI for the concern.
There are so many option in this regards of your note. But I am not proper getting what you are required. So plz ask widely and clearly to have clear picture.
SANJAY SEHGAL
JAIPUR (RAJASTHAN)
From India, Mumbai
What u want to know is not clear. But have some look over below suggestions:
1. Bonus can not be a part of wages. Therefor ask him to withdraw this part of amount.
2. It can not be possible to covered all the employee under one PF and ESI registration. It might be seperate for each employee but the employer registration can be single.
3. You may ask him for Form # 05 and form # 01 respectively for PF & ESI for the concern.
There are so many option in this regards of your note. But I am not proper getting what you are required. So plz ask widely and clearly to have clear picture.
SANJAY SEHGAL
JAIPUR (RAJASTHAN)
From India, Mumbai
Shekharji is all right as far as the lawness is concerned. But in actual there is practical difficulties as far as the Bonus is concerned. The new trend in the industries for this does not conform to the act precisely.
Rajan Kumar
From India, Delhi
Rajan Kumar
From India, Delhi
Dear Mr Rajan Kumar,
the reply given by me was in pursuance of the query which to my reading had legal advise in mind....since i am a practising lawyer dealing with employment laws i can only restrict my comment to the legality...am sorry but i dont understand what practical difficulty means when applying the law in the instant case...either it applies or it deos not apply...i have also clarified that in case a benevolent principal employer wants to pay , the best way to ensure there is no undue enrichment for the contractor is to ask for the details of persons employed in the relevant a/c year & pay based on # of days worked...
Regards
From India, Pune
the reply given by me was in pursuance of the query which to my reading had legal advise in mind....since i am a practising lawyer dealing with employment laws i can only restrict my comment to the legality...am sorry but i dont understand what practical difficulty means when applying the law in the instant case...either it applies or it deos not apply...i have also clarified that in case a benevolent principal employer wants to pay , the best way to ensure there is no undue enrichment for the contractor is to ask for the details of persons employed in the relevant a/c year & pay based on # of days worked...
Regards
From India, Pune
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Notification No G.S.R. 1128(E) Contract Labour (Regulation and Abolition) Central Amendment .pdf
LABOUR CONTRACT AGREEMENT.doc
Contract Labour Act.zip