Each month the employer and the worker both pay into the worker's Provident Fund account, run by EPFO. For a contract worker, the contractor deducts and deposits it, and the principal employer should check it reached each worker's account. Late payment carries simple interest of 12 percent a year and can attract damages.
Health and cash benefits for workers, paid for by a monthly contribution: 0.75 percent of wages from the worker and 3.25 percent from the employer. It is due within 15 days of the month end. Late payment carries simple interest of 12 percent a year, plus damages that cannot exceed the contribution itself.
A tax on employment set by each state that has one. The employer or contractor deducts it from wages and pays it to the state. Slabs, due dates and returns differ from state to state, so they are always checked against the worker's state of work.
A state fund for worker welfare, paid by the employer and the worker in states that run one. Amounts and due dates are set by each state.
The Contract Labour (Regulation and Abolition) Act, 1970 governed contract labour for decades. From 21 November 2025 its rules sit in the Occupational Safety, Health and Working Conditions Code, 2020, one of India's four labour codes. Registers kept under the old Acts remain valid.
The principal employer is the company whose premises or work the contract workers serve. If a contractor pays wages late or short, the principal employer must pay them and can recover the amount from the contractor (OSH Code, 2020, section 55(3)). The principal also provides welfare facilities for contract workers on site.
Compliance handbook for employers under the four labour codes (Ministry of Labour and Employment) → OSH Code factsheet (PIB) →
The register of wages a contractor keeps for every worker for each wage period: days worked, rate, gross pay, each deduction and net pay. It is shown on inspection and is the base for PF, ESIC and PT.
Compliance handbook for employers under the four labour codes (Ministry of Labour and Employment) →
The daily attendance register a contractor keeps for every worker. Form XVI is its form number under the old contract labour rules; registers kept in that form remain valid under the labour codes.
Compliance handbook for employers under the four labour codes (Ministry of Labour and Employment) →
The number EPFO gives each PF member. It stays the same when a worker changes job or contractor, so every month's PF can be traced to one person.
The monthly PF return an employer or contractor files on the EPFO employer portal: each member's wages and contributions, with the challan used to pay them.
Four codes - on Wages, Industrial Relations, Social Security, and Occupational Safety, Health and Working Conditions - in force from 21 November 2025. They bring many earlier labour laws, including the contract labour, wages, PF and ESIC laws, under one set of rules.
Labour codes in force (PIB) → Compliance handbook for employers under the four labour codes (Ministry of Labour and Employment) →
The lowest wage the law allows for a job, set by the government and revised from time to time. Under the Code on Wages, 2019, it is the floor for every worker's pay, and a contractor's wage register is checked against it.
Compliance handbook for employers under the four labour codes (Ministry of Labour and Employment) →
Ask each contractor for the month's PF return (ECR) and challan, the ESIC contribution details, the wage register and the muster roll. Match every worker by UAN and ESIC number, not by name. For each worker, check that the PF and ESIC deducted in the wage register were deposited for the same wages, and that no worker on the muster is missing from the returns. Send any difference back to the contractor with a plain reason, and approve the month only when it is closed.
With Teamnet. Teamnet does this every month: each contractor's documents are read and cross-checked worker by worker, and your HR approves.
EPFO employer portal → ESIC contributions →
Under the OSH Code, 2020, section 55(3), if a contractor pays wages late or short, the principal employer must pay the workers and can recover the amount from the contractor. Finding the short pay before you approve the month, and before you pay the contractor's bill, is the cheapest point to fix it.
With Teamnet. Teamnet shows any pay difference worker by worker, with a plain reason the contractor can act on, before the bill is paid.
Compliance handbook for employers under the four labour codes (Ministry of Labour and Employment) → OSH Code factsheet (PIB) →
At minimum a muster roll of daily attendance, a wage register for every wage period, and the PF, ESIC and Professional Tax returns with their challans. They are shown on inspection. Registers kept under the old Acts remain valid under the labour codes.
With Teamnet. Contractors upload the registers they keep today; Teamnet checks them against each other every month.
Compliance handbook for employers under the four labour codes (Ministry of Labour and Employment) → Labour codes in force (PIB) →
Late PF carries simple interest of 12 percent a year and can attract damages that rise with the length of the delay. ESIC is due within 15 days of the month end; late ESIC carries simple interest of 12 percent a year, plus damages that cannot exceed the contribution itself.
With Teamnet. Teamnet shows every due date and flags a late or short deposit while there is still time to act.
Keep the muster roll and wage register for the same wage period, match every worker by UAN and ESIC number, deposit PF and ESIC for the wages in the register, and send the returns and challans with the registers. A month whose documents agree with each other is ready to accept.
With Teamnet. You upload the month as you keep it; Teamnet shows what does not yet agree, with a plain reason, before your client reviews it.
Compliance handbook for employers under the four labour codes (Ministry of Labour and Employment) → EPFO employer portal →
With the UAN, a worker can sign in to the EPFO member portal and see each month's deposit. Each worker can also see their days, pay, and the PF and ESIC paid in their name where these apply, on the Teamnet app, free for employees and workers.
General information, not legal advice. Laws and rates change; check the official source linked under each answer.
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