Dear All,
We have employed contractual agenies for housekeeping & security services wherein we are paying them minimum wages , pf & esi timely.But we have not paying them bonus , leave encashment.However we have never been approcahed by labour officer on this as we have good relations with them.what i want to know that what would be the extra cost we will incur in case we provide contract labour with bonus & leave encashment.
The organisation financial status is not that sound at the moment. Whether is there any way possible where we can avoid paying these benefits to contract labour within rules by some modification in their contract letter or salary break up.If no, what can be the ramification suffered by us financialy & in court in case of non complaince of these benefits.
Kindly advise
Thanks & Regards
C.M.Mohla
From India, Delhi
14We have employed contractual agenies for housekeeping & security services wherein we are paying them minimum wages , pf & esi timely.But we have not paying them bonus , leave encashment.However we have never been approcahed by labour officer on this as we have good relations with them.what i want to know that what would be the extra cost we will incur in case we provide contract labour with bonus & leave encashment.
The organisation financial status is not that sound at the moment. Whether is there any way possible where we can avoid paying these benefits to contract labour within rules by some modification in their contract letter or salary break up.If no, what can be the ramification suffered by us financialy & in court in case of non complaince of these benefits.
Kindly advise
Thanks & Regards
C.M.Mohla
From India, Delhi
Dear Mohla
You have not mentioned in the your query that what were the terms and conditions given by contracting agencies who in turn is the employer for the workers engaged. The number of workers normally engaged on any particular day has also not been mentioned. With the available information I would kike to suggest the following.
Primarily it is the responsibility of contracting agency to follow all the applicable labour law.
As a principal employer you have to ensure the compliance.
Lasty, please do not compromise on the compliance of labour law due to the reason of poor financial health of the company. There other more legal way to cut the cost.
with kind regards,
Vinay
From India
You have not mentioned in the your query that what were the terms and conditions given by contracting agencies who in turn is the employer for the workers engaged. The number of workers normally engaged on any particular day has also not been mentioned. With the available information I would kike to suggest the following.
Primarily it is the responsibility of contracting agency to follow all the applicable labour law.
As a principal employer you have to ensure the compliance.
Lasty, please do not compromise on the compliance of labour law due to the reason of poor financial health of the company. There other more legal way to cut the cost.
with kind regards,
Vinay
From India
Dear Vinay, we are not paying contractors bonus & leave encashment amount.Kindly highlight what would be the ramification for the same. Thanks & Regards C.M.Mohla
From India, Delhi
From India, Delhi
Though it's a matter of debate both component is responsibility of contractors not your's as a principle employer.
As far as concerned about Bonus, you can make a monthly component in their existing CTC " advance statutory bonus " by cutting down any other component and reconcile the same at end of year and prepare all other documents in accordance with Bonus Act.
Leave encashment is not a regular payment, it has to be paid at the time of leaving of service, its the responsibility of contractor its self, you are no where responsible for the same.
As far as concerned about Bonus, you can make a monthly component in their existing CTC " advance statutory bonus " by cutting down any other component and reconcile the same at end of year and prepare all other documents in accordance with Bonus Act.
Leave encashment is not a regular payment, it has to be paid at the time of leaving of service, its the responsibility of contractor its self, you are no where responsible for the same.
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APPROVAL, CONTRACTUAL EMPLOYEES.doc
Additional Compliance For Employees Engaged By Or Through Contractors.pdf