The government has decided to get tough with large employers who increasingly rely on contract workers often without paying them their statutory dues such as employees’ provident fund contribution.
As part of the plan, the Employees Provident Fund Organisation (EFPO) has asked all the public sector firms to upload on their websites the details of project contracts awarded to various agencies in a bid to ensure contract workers get provident fund benefits.
Central PF Commissioner V.P. Joy, who recently took charge of the Rs. 10 lakh crore retirement fund body, is expected to send a similar directive to 4,700 private companies employing over 1,000 workers each.
The move comes amid fresh instances of industrial strife in recent weeks which were triggered due to pay disparity between contract staff and regular employees.
The Contract Labour Act requires employers to pay equal pay and benefits for work done by contract employees that is similar to regular employees’ role. But its implementation has been weak and attempts to bring in a stronger law have been thwarted as government agencies and public sector units also deploy a large number of contract employees and are reluctant to pay them more.
EPFO is looking to make public as well as private sector companies, which are the principal employers of contract workers, accountable for providing PF benefits.
“It is often observed that the contractors claim huge amount towards EPF of contract workers from the principal employer but either do not deposit it at all or deposit it partly thus depriving these workers of provident fund, pension and insurances benefits,” Mr.Joy said in a missive to 90 Maharatna, Navaratna and Mini Ratna PSUs last week.
The letter was also sent to other public sector companies such as National Buildings Construction Corporation, National Highways Authority of India and Central Public Works Department (CPWD), among others.
The public sector companies will have to register the details of all contract employers of each project on EPFO’s website.
“It is the responsibility of the PSUs to see if provident fund is paid by their contractors to its workers. They can upload contracts on EPFO’s website which will enable them to check if they are making PF payments regularly. In this way, all the contract bills will be paid only after ensuring PF is given to workers,” said a senior EPFO official.
“The entire information can be viewed and updated by principal employer at any time. The regional and sub-regional office (of EPFO) will also take steps to secure compliance of employees engaged by the contractor towards EPF,” the letter said.