Contract Labour Act and ESIC Act
shiksssssssss
(Querist) 16 June 2011
This query is : Resolved
If a company is using services of contractual employees in all functions in various roles. Company has appointed employees on contractual basis and pays them consultancy fees for their services after deducting TDS.
Total no. of employees on contractual basis is 80. And 42 employees are receiving wages below Rs. 15000. The nature of work of employees is administrative, clerical, accounts, warehouses supervisor etc. and company is not deducting and contributing any PF and ESI for contractual employees even if the employees are covered under minimum limit of wages as per ESIC Act.
As per section 4 clause (a) of Labour Contract Act 1970 Contract is applicable to every establishment in which twenty or more workmen are employed or were employed on any day of the preceding twelve months as contract labour.
As per section 2 clause (i) "workman" means, any person employed, in or in connection with the work of any establishment to do any skilled, semi-skilled or un-skilled manual, supervisory, technical or clerical work for hire or reward, whether the terms of employment be express or implied but does not include any such person -
(A) who is employed mainly in a managerial or administrative capacity; or
(B) who, being employed in a supervisory capacity draws wages exceeding five hundred rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature;
Please through light on the below points:
1) do all the contractual employees cover under the definition of "workmen" or don't cover due to sub clause (B) of clause (i) of section 2
2) Is company not liable to contribute ESIC contribution for employees whose wages are less than 15000 Pm, If all the employees are covered under group Medical insurance policy of company.
3) Please explain the procedure of taking exemption
Please suggest on the following points:
1) Is company liable to get register in Contract Labour Act?
2) Is company liable to deduct PF for contractual employees?
3) Is Company liable to contribute ESIC, even if
K.S.Srinivas
(Expert) 28 July 2011
1. The company is supposed to register under section-7 of contract Labour Act.
2. Liable to deduct PF for contractual employees.
leena Sharma
(Expert) 10 November 2014
Accordingly to the Act, it is the liability of the Principal employer to deduct the ESI and PF of the employees of contractor is he is not complying with the said laws.
