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Pf applicabbility

KVS RAO (Manager) (25 Points)

20 March 2012

X company has undertaken date entry work from a Telco( Tele Comapany) for entering data in the customer application form. X company has employed some employees and done the data filling work. Some part was given to third party companies and they took up the work and completed the work at their premises/offices located at different locations,with their emploees.

X has paid PF for its employees.

Now PF authorities are asking X company , proof of having paid the PF for the employees of third party companies.

Is X company responsible for payment of PF for employees of Third Party?

Please clarify and Comment.

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2 Replies

Amit (Associate) (21 Points)
Replied 04 April 2012

As per Section 30 of the Employees Provident Funds Scheme, 1952 “X” Company should, in the first instance, pay both the contribution payable by himself and also, on behalf of the member employed by him directly or by or through third party company. However, if the third party company is an independent entity which undertakes such works and are independently registered under the Act and takes such work from various organization then it will have to be contended that they are independent organization which is independently covered under the Act. It will also have to be shown that the said third party completed the work at their own premises/offices at different locations than that of the “X” Company.

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Kolluru Krishna Murty (Partner) (315 Points)
Replied 05 April 2012

As per provisions PF&MP Act, X company is the "Principal Employer" of the employees engaged by the company( Say Y) for whom the job is out-sourced.

If the Y company is having registration under PF Act and the proof is shown to the PF authorities to the extent that they are recovering and pay PF,it is all right,other wise X is responsible as "Principal Employer" for PF implementation by Y.

kkm