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A Durwan provided to us by a manpower agency under a contract is employed at our office. However, we do not pay any wages/benefits to him directly; but pay a consolidated amount, under the contract, to the man power agency.
The man power agency is now demanding payment of 21 days Leave Salary. Are we liable to pay, since he is not our direct employee???
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Dear Loonas,

Section 21 of the Contract Labour (Regulation and Abolition) Act, 1970 provides the following-

21. Responsibility for payment of wages.-

(1) A contractor shall be responsible for payment of wages to each worker employed by him as contract labour and such wages shall be paid before the expiry of such period as may be prescribed.

(2) Every principal employer shall nominate a representative duly authorized by him to be present at the time of disbursement of wages by the contractor and it shall be the duty of such representative to certify the amounts paid as wages in such manner as may be prescribed.

(3) It shall be the duty of the contractor to ensure the disbursement of wages in the presence of the authorized representative of the principal employer.

(4) In case the contractor fails to make payment of wages within the prescribed period or makes short payment, then the principal employer shall be liable to make payment of wages in full or the unpaid balance due, as the case may be, to the

contract labour employed by the contractor and recover the amount so paid from the contractor either by deduction from any amount payable to the contractor under any contract or as a debt payable by the contractor.

Trust the above will clarify grounds to you. Please feel free to post further queries you might have.


Dear Loonas,
You could refer to the following for the full text of the Contract Labour (Regulation and Abolition) Act, 1970.
Dear Loonas,
What is the provision in the contract agreement? Are you engaging more than 20 contractual workers, in that case only CLRA will be applicable. If it is appl then you need to follow the provisions.
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