Responsibility for payment of wages
"M/s A" is the License Holder under Contract Labour Act, and also PF and ESI Code, Gate Pass is in the name of "M/s A".
"M/s A" has engaged Workmen thru Sub Agency "M/s B" for construction activity.
But Wage Payment of the Workmen has been disbursing by the "M/s B"
And PF & ESI have been deposited by "M/s A"
My question is that, can "M/s B" pay wage to the workmen? Under Contract Labour Act, 1970.
Will Principal Employer accept it?
From India, Shillong
1"M/s A" is the License Holder under Contract Labour Act, and also PF and ESI Code, Gate Pass is in the name of "M/s A".
"M/s A" has engaged Workmen thru Sub Agency "M/s B" for construction activity.
But Wage Payment of the Workmen has been disbursing by the "M/s B"
And PF & ESI have been deposited by "M/s A"
My question is that, can "M/s B" pay wage to the workmen? Under Contract Labour Act, 1970.
Will Principal Employer accept it?
From India, Shillong
Under the Contract Labour Act, 1970, the principal employer (M/s A) is responsible for ensuring that contract laborers receive their dues, including wages. Section 21 of the Contract Labour Act, 1970, states: "The contractor shall pay wages to the contract labour employed by him, and such wages shall be paid before the expiry of such period as may be prescribed." However, Rule 21(2) of the Contract Labour (Regulation and Abolition) Central Rules, 1971, allows: "The contractor may pay wages to the contract labour employed by him through the principal employer, if the principal employer so desires."
Under the Contract Labour Act, 1970, the principal employer (M/s A) is responsible for ensuring that contract laborers receive their dues, including wages.
Section 21 of the Contract Labour Act, 1970, states:
"The contractor shall pay wages to the contract labour employed by him, and such wages shall be paid before the expiry of such period as may be prescribed."
However, Rule 21(2) of the Contract Labour (Regulation and Abolition) Central Rules, 1971, allows:
"The contractor may pay wages to the contract labour employed by him through the principal employer, if the principal employer so desires."
In your scenario: M/s A (principal employer) holds the license and is responsible for PF and ESI contributions.M/s B (sub-agency) pays wages to workmen.Legally,
M/s B can pay wages to workmen, but:
Principal Employer's Consent: M/s A should have given consent or authorization to M/s B to make wage payments.
Compliance with Act and Rules: Wage payments by M/s B must comply with the Contract Labour Act and Rules.
No Violation of Labor Laws: Ensure no labor law violations, such as delayed or underpayment of wages.
The principal employer (M/s A) should:
Monitor Wage Payments: Regularly monitor wage payments made by M/s B.
Ensure Compliance: Verify compliance with labor laws and regulations.
Acceptance by the principal employer (M/s A) depends on:
Consent: Prior consent or agreement with M/s B.
Compliance: Adherence to labor laws and regulations.
From India, Cuttack
Under the Contract Labour Act, 1970, the principal employer (M/s A) is responsible for ensuring that contract laborers receive their dues, including wages.
Section 21 of the Contract Labour Act, 1970, states:
"The contractor shall pay wages to the contract labour employed by him, and such wages shall be paid before the expiry of such period as may be prescribed."
However, Rule 21(2) of the Contract Labour (Regulation and Abolition) Central Rules, 1971, allows:
"The contractor may pay wages to the contract labour employed by him through the principal employer, if the principal employer so desires."
In your scenario: M/s A (principal employer) holds the license and is responsible for PF and ESI contributions.M/s B (sub-agency) pays wages to workmen.Legally,
M/s B can pay wages to workmen, but:
Principal Employer's Consent: M/s A should have given consent or authorization to M/s B to make wage payments.
Compliance with Act and Rules: Wage payments by M/s B must comply with the Contract Labour Act and Rules.
No Violation of Labor Laws: Ensure no labor law violations, such as delayed or underpayment of wages.
The principal employer (M/s A) should:
Monitor Wage Payments: Regularly monitor wage payments made by M/s B.
Ensure Compliance: Verify compliance with labor laws and regulations.
Acceptance by the principal employer (M/s A) depends on:
Consent: Prior consent or agreement with M/s B.
Compliance: Adherence to labor laws and regulations.
From India, Cuttack
Dear Mr Santosh,
The contract awarded to M/s A by the Principal Employer and to obtain CL(R&A) licence PE has issued Form V.
Therefore for every violation M/s A shall be held liable by the PE and statutory authority. In view of the above M/s A has to maintain all the records as M/s A but not as the 'B' sub-contractor. The denial of acceptance by the PE is vaild & legal. The status of M/s B shall remain as mere stranger. Until the PE permits to engage M/s B as sub-contractor under M/s A, still PE consider main contractor responsible for M/s A & B.
From India, Mumbai
The contract awarded to M/s A by the Principal Employer and to obtain CL(R&A) licence PE has issued Form V.
Therefore for every violation M/s A shall be held liable by the PE and statutory authority. In view of the above M/s A has to maintain all the records as M/s A but not as the 'B' sub-contractor. The denial of acceptance by the PE is vaild & legal. The status of M/s B shall remain as mere stranger. Until the PE permits to engage M/s B as sub-contractor under M/s A, still PE consider main contractor responsible for M/s A & B.
From India, Mumbai
We assume that :
A has taken approval of PE for appointing sub-contractor B
The Agreement / contract between A and PE allows use of sub-contractors
In such a case, PE will not object to B paying the wages, but will hold A responsible for any lapses and A will be responsible to show the registers etc where required. In all other cases, A should maintain the registers as if the workers are his own. PE will (in most cases), not care who is paying the wages as they provide proof of payment by way of bank statements, etc.
If Approval of PE was not taken, then you have a problem of a higher magnitude.
From India, Mumbai
A has taken approval of PE for appointing sub-contractor B
The Agreement / contract between A and PE allows use of sub-contractors
In such a case, PE will not object to B paying the wages, but will hold A responsible for any lapses and A will be responsible to show the registers etc where required. In all other cases, A should maintain the registers as if the workers are his own. PE will (in most cases), not care who is paying the wages as they provide proof of payment by way of bank statements, etc.
If Approval of PE was not taken, then you have a problem of a higher magnitude.
From India, Mumbai
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