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Sunday, December 06, 2015

Principal employer can be liable for EPF contribution of contractor when the latter does not have code number. and Principal employer not liable for provident fund dues of contractor with independent code number.

Dear all

As per the recent judgement as passed by the PUNJAB & HARYANA HIGH COURT  Principal employer can be liable for EPF contribution of contractor when the latter does not have code number. and Principal employer not liable for provident fund dues of contractor with independent code number.

IMPORTANT POINTS
  • When code No. is allotted to a contractor under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, it becomes an establishment under section 2(e) of the Contract Labour (Regulation and Abolition) Act, 1970 making it liable to pay EPF contributions of its employees.
  • When the contractor has not been allotted code No., the contributions in respect of contractor's employees shall have to be paid at the first instance by the principal employer and
    recover the same later on from the contractor.
  • The Contractor having an independent code No. under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, he is liable to pay EPF contributions in respect of employees whose salary is paid by it.
  • Principal employer is not liable to pay EPF contributions in respect of employees engaged through independent contractor who has been having an independent code No. under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952.
Copy of the judgement is appended below