Principal employer
What a principal employer answers for under the labour codes.
When a contractor pays late or short, the principal employer pays. Here is what the codes say, and when to check.
What the law says
Four things you answer for.
- Wages
- If a contractor pays wages late or short, the principal employer must pay the workers and recover the amount from the contractor. (OSH Code, 2020, section 55(3))
- PF and ESIC
- The same holds for contract workers' PF and ESIC. (Code on Social Security, 2020, sections 17 and 31)
- Late PF and ESIC
- Late payment carries interest at the notified rate, plus damages that cannot exceed the arrears. (Code on Social Security, 2020, sections 127 and 128)
- Welfare on site
- The principal employer provides the welfare facilities the code sets for contract workers on site. (OSH Code, 2020, section 53)
Code on Social Security, 2020 (text) → OSH Code factsheet (PIB) → Compliance handbook for employers under the four labour codes (Ministry of Labour and Employment) →
When to check
Before you approve the month and pay the bill.
Monthly wages are paid by the 7th of the following month; PF and ESIC are due by the 15th. Finding a short payment before you approve the month, and before you pay the contractor's bill, is the cheapest point to fix it.
- How to check a contractor's PF and ESIC each month
- What happens if a contractor short-pays wages
- What late PF or ESIC costs
With Teamnet. Each contractor's month is checked worker by worker against the wage register, muster and returns, and your HR approves before the bill is paid.
Last updated 5 November 2026. The law is quoted from the official texts linked above.