Centre asks states to include statutory obligations in contract of employees hired through outsourcing agencies
Contents News/Article Date: 19th April 2023
Relating to which Act: The Employees’ State Insurance (ESI) Act, 1948; The Contract Labour (Regulation & Abolition) Act 1970; The Employees Provident Funds & Miscellaneous Provisions Act, 1952;
Penalty under the Act:
- Under PF: A scheme framed under this Act may provide that any person who contravenes or makes default in complying with any of the provisions thereof, shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both.
- Under ESI: Section 85: Penalty for non-compliance with provisions
- Section 85 (a) to (g) basically contains compliances which employers and managers have to carry out. Consequently, failure to do so can make them liable for punishment as Section prescribes. Punishment may be in the form of either imprisonment or fine or both.
- Section 85(a): Penalty for failure to pay a contribution. All employers under the Act have to periodically pay some money to the ESI Corporation for the benefit of employees. Non-payment of this contribution is a serious offense because it directly affects insurable employees.
Hence, the maximum imprisonment for this offense is 3 years and the minimum is 6 months with Rest. 5,000 as fine.
- Under Contract Labour: If any person contravenes any of the provisions of this Act or of any rules made there under for which no other penalty is elsewhere provided, he shall be punishable with imprisonment for a term which may extend to three months, or with fine which may extend to one thousand rupees, or with both.
Applicable to which State: All the States and Establishments covered by Contract Labour Act, PF Act and ESI Act.
Type: PTI New Report
Pertains to: Agencies employing contract labour
Relevance of this news: Karma Global is in the business of HR Services, Payroll, Outsourcing and Regulatory Compliances right from its inception in 2004 and since then, has brought in a lot of efficiencies and technological upgradations with experts on its roll, to ease the hassles of Payroll Processing, Temp Staffing, On-boarding, Employee Life Cycle, Statutory, Regulatory and Payroll compliances by providing customized solutions to all its elite clients.
Karma Global does excellent work on providing ESI Services both to establishments as well as Insured Employees and in this respect, it will inform all its clients and insured employees about the many announcements that the Government has made in terms of expansion of ESI Scheme, so as to make it available in the remotest of places viz. 744 districts and also to make health facilities and medical colleges in progressive districts of our country further expanding post graduate medical seats.
And in this instance: The Centre has asked states to incorporate certain provisions in the contracts of outsourced workers to protect their rights amid concerns about underpayment of wages and other benefits. The Ministry of Labour and Employment recently incorporated six statutory obligations on GeM (Government e Marketing) portal in the contract of hiring manpower through outsourcing agencies in Government of India offices in order to protect the interest of the contractual workers, a labour ministry statement said.
Of late in a letter addressed to Chief Secretaries/Administrators of all States/UTs, Union Labour Secretary Arti Ahuja has expressed concern about the underpayment of contractual workers engaged in State/UT offices through outsourcing agencies due to unauthorized deduction in wages of such workers made by the manpower hiring agencies.
Subject: Centre asks states to include statutory obligations in contract of employees hired through outsourcing agencies
Appended is the complete news item
Centre asks states to include statutory obligations in contract of employees hired through outsourcing agencies
Source: PTI New Delhi
In order to avoid such exploitation to the workers engaged through outsourcing agencies in State/UT Government offices, Ahuja has advised Chief Secretaries/ Administrators of all States/UTs to incorporate certain statutory obligations in their contract so that the rights of the workers could be protected.
The Centre has asked states to incorporate certain provisions in the contracts of outsourced workers to protect their rights amid concerns about underpayment of wages and other benefits.
The Ministry of Labour and Employment recently incorporated six statutory obligations on GeM (Government e Marketing) portal in the contract of hiring manpower through outsourcing agencies in Government of India offices in order to protect the interest of the contractual workers, a labour ministry statement said.
Of late in a letter addressed to Chief Secretaries/Administrators of all States/UTs, Union Labour Secretary Arti Ahuja has expressed concern about the underpayment of contractual workers engaged in State/UT offices through outsourcing agencies due to unauthorized deduction in wages of such workers made by the manpower hiring agencies.
Further, she also expressed concern of the delayed payment of monthly wages to such workers by the agencies and low deposit of EPF (Employees Provident Fund) and ESIC (Employees’ State Insurance Corporation) contributions of the workers.
In order to avoid such exploitation to the workers engaged through outsourcing agencies in State/UT Government offices, Ahuja has advised Chief Secretaries/ Administrators of all States/UTs to incorporate certain statutory obligations in their contract so that the rights of the workers could be protected.
These obligations include mandatory contribution of EPF and ESIC by the agencies in timely manner.
States are also asked to provide in the contract that service provider/contractor shall be responsible for paying wages to contract labour at rates not less than the minimum wages as notified by the Appropriate Government.
Another provision is that the service provider/contractor shall not make any unauthorized deductions from the wages of the contract labour.
As per the Contract Labour (Regulation and Abolition) Act,1970, the service provider/contractor shall be responsible for ensuring that wages are paid to the contract labour on time, she also suggested.
The principal employer/buyer shall ensure that the wages are paid on time to the contract labour by the service provider/contractor.
In case the service provider/contractor fails to pay the wages on time or makes short payment, the principal employer/buyer shall be liable to pay the wages to the contract labour directly and recover the amount from the service provider/contractor, is another provision
The service provider/contractor shall be responsible for paying bonus to contract labour in the manner prescribed by the Payment of Bonus Act, 1965 & shall get reimbursed from the buyer, was also suggested.
The service provider/contractor shall be responsible for paying proportionate gratuity to contract labour who have rendered continuous service as per the provisions of the Payment of Gratuity Act, 1972, was also provided.