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Tuesday, 25 November 2014

Compliance under the EPF & MP Act, 1952 in respect of employees engaged by or through the Contractors.


कर्मचारी भविष्य निधि संगठन
( श्रम मंत्रालय, भारत सरकार )
क्षेत्रीय कार्यालय, मुंबई -III, कांदिवली
भविष्य निधि भवन,प्लाटनं. 222,सेक्टर 3,
चारकोप मार्केट, चारकोप पोयसररोड,
कांदिवली (),मुंबई - 400 067
फोन : 28692604 / 28692531 फैक्स : 28695297

(Ministry of Labour, Govt.ofIndia)
BHAVISHYA NIDHI BHAVAN, PLOT NO.222, SECTOR-3 CHARKOP MARKET,  CHARKOP  POISAR ROAD,                                                KANDIVALI (W) MUMBAI-400067
Tel: 28692604 / 28692531  Fax: 28695297

No.MH/PF/RO/KND/EDP/378                                                                                                                    Date: 24-Nov-14


Subject: Compliance under the EPF & MP Act, 1952 in respect of employees engaged   by or through the Contractors.

              You may be aware that Employees’ Provident Fund Organisation administers the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 and the Schemes framed thereunder which aim to provide social security in the form of Provident Fund, Pension and Insurance to all the employees who are employed for wages in any kind of work, manual or otherwise, in or in connection with the work of an establishment and who get wages directly or indirectly from the employer and which includes any person employed by or through a contractor in or in connection with the work of the establishment and apprentices engaged therein (other than the apprentice under the Apprentice Act, 1961).

2.           You have been regularly complying with the provisions of the Act in respect of your direct employees under EPF Code no. ____________ However, activities like watch and ward, house-keeping, data-entry etc. you must have outsourced to agencies and contractors. At times, the workers engaged by these agencies and contractors are deprived of Provident Fund, Pension and Insurance. Even if they receive such benefits, those do not commensurate with the wages they earn every month. Similarly, various agencies and contractors often receive employer’s contribution on full wages from you but while extending the provident fund benefits etc. to their workers, these agencies bifurcate the wages into basic wages and various other allowances, which are not within the ambit of basic wages, to evade the provident fund. This is nothing but subterfuge of wages. As a result, the poor workers are deprived of their legitimate share of provident fund etc. Further, the residual employer’s contribution which these agencies do not pass on to their workers tantamount to pilfering of provident fund money. Thus, while settling the periodic bills of agencies and contractors which you engage, you become a party to this pilferage unknowingly. Your intervention in this regard will ensure that all such employees do get social security benefits.

3.           While awarding various contracts, it may please be ensured that the agencies and contractors shall have Provident Fund Code Number and all the contract employees deployed by them are enrolled as members of Provident Fund. In this regard, your kind attention is drawn to Paragraph 30(3) of the Employees’ Provident Fund Scheme,1953 which provides that it shall be the responsibility of the principal employer to pay both the contributions payable by him in respect of the employees directly employed by him and also in respect of the employees employed by or through a contractor.

4.           A provision has been made on the Official Website of EPFO.,on the “establishment search option” to verify as to whether the agencies and contractors having Provident Fund Code numbers are regularly depositing Provident Fund Contributions every month in respect of all the employees deployed by them. The above facility may be utilized to check the compliance position of the agencies and contractors to the provisions of the Act and the Schemes framed there under to whom the contractors are awarded by you. Wherever the contractors do not have any Provident Fund Code number or if any non-compliance by any agency or contractor is noticed, the details of such establishments may please be informed to this office so that appropriate action can be initiated and poor workers’ interest is protected.

5.           The Enforcement Officer of this Office shall be visiting your establishment to ascertain the status of compliance in respect of the contract employees. You are requested to handover the details of the outsourced work together with the name and address of the contractor in the following format for verification so as to ensure compliance.

Sl No.
Name of Contractor outsourced Agency, Address
Work Order(s) no. and Date and duration of work
Nature of work
No of employees
Wages paid
PF Code No. If any
Name of PF Office where PF and allied dues are deposited by contractor

6.           I am sure that your esteemed organization is interested in compliance of laws of land and therefore, you will give full support to the Enforcement Officer of the department. You will give us no occasion to resort to other statutory provisions existing in Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 and Schemes framed thereunder. Our joint venture is that contract/outsourced employees get the social security benefits to which they are entitled to and to which your organization is committed.

Yours Faithfully,

Assistant PF Commissioner