Principal employer ensures timely wages; direct payment if service provider fails: Labour Ministry Order on coverage of workers engaged in projects under the EPF & MP Act, 1952

Principal employer ensures timely wages; direct payment if service provider fails: Labour Ministry writes to MoHUA on Coverage of workers engaged in projects under the EPF & MP Act, 1952

F.No. O/2/2023-Admn. V-MoHUA
Computer No: 9168177
Government of India
Ministry of Housing and Urban Affairs
(Admn. V Section)

Nirman Bhawan, New Delhi 110011
Dated the 13th December, 2023

OFFICE MEMORANDUM

Subject- Coverage of workers engaged in projects of MoHUA under the EPF & MP Act, 1952.

The undersigned is directed to circulate a D.O No. CAIU/064/V-11/2023 dated 08.12.2023 received from Ministry of Labour & Employment on the aforementioned subject for compliance and necessary action please.

Encls: As above.

(Sanjay Rawat)
Under Secretary to the Govt. of India
E-mail – Sanjay.rawat70[at]nic.in

MINISTRY OF LABOUR & EMPLOYMENT
SHRAM SHAKTI BHAVAN
NEW DELHI – 110001

D.O No. CAIU/ 064/V-III/2023

December 8, 2023

Dear Sir,

I am writing to you in connection with social security of all workers especially those who are prone to hazards. As you are aware that Employees’ Provident Fund Organization (EPFO) provide social security in the form of Provident Fund, Pension and Insurance as well as health care and eight kinds of cash benefits to hired workers as per the eligibility. EPFO provides following benefits in the form of Social Security to the workers/ survivors:

1. Provident Fund
2. Pension to Worker/ survivors
3. Employees Deposit Linked Insurance (up to Rs. 7 lakhs)

2. Labour costs (including PF) are factored during Cost Estimation of any project. This labour cost is paid to the implementing agencies and contractors by the Ministries. However, this amount, though paid by Ministry, does not reach to the intended beneficiaries i.e. workers due to non-compliance of EPF Act related statutory guidelines by the employers/contractors /outsourcing agencies.

3. Kind reference is invited to Cabinet Secretary D.O. No. 391/ 1/2/2015-CA.V dated 11/08/2015 (enclosed) vide which the Ministries/Departments, PSUs and other bodies as Principal Employer have been asked to ensure that legally entitled social security benefits are extended to the outsourced workers in Ministry /department, PSUs & other bodies.

4. It has also been conveyed that Ministries/ Departments, PSUs and other bodies need to ensure that the contractors Who are providing outsourced staff, who registered with EPFO and payment to the contractors is made only after verification that the social security coverage is being extended to such staff. Following statutory obligations have been incorporated into outsourcing through Government e-Market Place (GeM) Portal:

Principal employer ensures timely wages

1. The 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.
2. The service provider/contractor shall not make any unauthorised deductions from the wages of the contract labour.
3. As per the Contract Labour Regulation and Abolition Act, 1970, the service provider/ contractor shall be responsible for ensuring that wages paid to the contract labour on time. 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.
4. The service provider/contractor shall be responsible for paying bonus to contract labour in the manner prescribed by the Payment of Bonus Act, 1965.
5. The service provider/contractor shall be responsible for paying proportionate gratuity to contract labour/employees who have rendered continuous service as per the provisions of the Payment of Gratuity Act, 1972.

I would request your kind intervention in issuing necessary directions to ensure coverage of workers engaged in projects under MoHUA under the EPF & MP Act, 1952 to secure the future of workers by extending social security to them viz. provident fund, pension and insurance. EPFO would provide all necessary assistance in this exercise.

Yours sincerely,
Sd/-
(Arti Ahuja)

Shri Manoj Joshi
Secretary
Ministry of Housing and Urban Affairs,
Nirman Bhawan,
New Delhi-11000