The EPF & MP Act, 1952 defines employee u/s 2 (f) as any person who is employed for wages in any kind of work, manual or otherwise, in or in connection with the work of an establishment, and who gets his wages directly or indirectly from the employer and includes any person employed by or through a contractor in or in connection with the work of the establishment.
Many employers outsource business processes of their establishment to contractors and also engage workers in or in connection with the work of the establishment by or through contractors and in such cases employer’s liability under EPF & MP Act, 1952 is payable by the Principal employers. The contractors are registered independently as an establishment with EPFO and they are required to report EPF compliance in r/o workers provided to their Principal Employers through ECRs. The UANs of the workers and the attendance/wage payment records are verified by the Principal employers to settle the claims.
EPFO has introduced a new facility in its unified portal enabling the employers to declare their contractors and the period of the contract so that they may view and monitor the compliances in respect of their contract employees reported in the ECR. Through this facility, the principal employers can also view whether the employer’s share of EPF contributions paid by the principal employer has been remitted by the contractor for all contract workers or not. Please refer to the notification for more details