Your plant runs on contract labour.
Your liability does too.
Packing, utilities, materials handling, housekeeping, loading — in most Indian plants a third or more of the people on site are not on your rolls. Under the Factories Act they still count as your workers. Under CLRA §21, EPF §8A and ESI §40, their contractor’s defaults still become your penalties.
yfy verifies each contractor’s monthly bill against your own gate and biometric records and the statute that applies at that plant, and produces a capped release figure before Accounts Payable pays anything.
Six statutes, four different headcounts
A threshold engine that compares one headcount figure against every rule is wrong in several directions at once. Manufacturing is where that shows up first.
| Statute | What it counts | Why it catches plants out |
|---|---|---|
| Factories Act 1948, §2(l) and §2(m) | Everyone working on the premises — your employees plus deployed contract labour | Registration and most obligations key off this combined figure, not your payroll headcount. Plants routinely under-count. |
| Contract Labour (R&A) Act 1970 | Contract workers engaged, per establishment | The base threshold is 20, and several states have amended it. We evaluate per state, against that state’s deployments. |
| Factories Act §46, §48, §49 | Canteen at 250+ workers · crèche at 30+ women workers · welfare officer at 500+ | Each has its own base. Crossing one does not cross the others, and a single headcount flag gets this wrong. |
| Factories Act §51, §54, §56, §59 | Hours: 48 per week, 9 per day, spread-over limits, overtime at double the ordinary rate | Three-shift operations breach spread-over quietly. Overtime billed at single rate by a contractor is a shortfall you are liable for. |
| Inter-State Migrant Workmen Act 1979 | Inter-state migrant workmen engaged | Applies from 5 workmen. Separate registers, displacement allowance, journey allowance. |
| Industrial Relations Code / Standing Orders | Workmen employed | Standing orders, grievance committee and, under the Code, worker thresholds that differ from the legacy act. |
We hold three counting bases, not one. CLRA counts contract workers. The Factories Act counts everyone on premises under §2(l). Everything else counts your own rolls. And a CLRA state amendment is judged against that state’s deployments, not your national total — so a worker deployed in two states counts in both establishments.
Four failure modes we look for at every plant
The statutory vulnerabilities that create unbudgeted balance-sheet liabilities during labour inspections.
Billed man-days exceed the gate
The contractor invoices 26 days for a worker your turnstile recorded 21 times. Nothing on an ERP invoice match catches this, because the purchase order was for a service, not a headcount.
Overtime at single rate
§59 requires double the ordinary rate. A contractor billing overtime at 1× is under-paying the worker, and the shortfall is recoverable from you under CLRA §21.
Challans that don’t cover your plant
A contractor’s ECR may be genuine and still not include the workers deployed at your establishment. Without the establishment code for that state, the challan cannot be reconciled to your site.
Skill category drift
A worker deployed as skilled and paid at the unskilled minimum wage. The gap is per worker, per month, and invisible in an invoice total.
What we do about it
Automated statutory verification controls that sit directly between contractor billing and Accounts Payable.
Gate and biometric trim
Your access control and biometric muster feed the verification directly. Claimed man-days are capped at your own record, per worker, per site — not at a sheet the contractor supplied.
Statutory recomputation, per plant
Minimum wage resolved for that plant’s state, zone and skill category. Statutory bonus under the Payment of Bonus Act 1965. PF, ESI and PT recomputed for that jurisdiction and reconciled against uploaded challans.
Per-state establishment codes
EPF, ESI, LWF and CLRA licence numbers differ by state for the same contractor. We hold them per state and per site, because a multi-plant employer cannot otherwise prove a challan covered the right people.
Eligible-to-pay release cap
Verified wages plus statutory add-backs plus agreed margin plus GST. Paying above it requires an explicit human override with a recorded reason — which is precisely what an inspection asks to see.
If you are regulated, training evidence is not an HR problem
A CDSCO, USFDA or customer audit asks for qualification and requalification records against a named SOP, for a named person, on a named date. Most plants assemble that from an LMS export, a signature sheet and somebody’s folder.
Here, a lapsed certification raises an obligation in the compliance register, assigns the renewal, and files the completion certificate into the evidence vault inside the statutory audit trail — governed at upload, with a hash-chained ledger that holds no personal data of its own.
The same loop covers POSH training, which is mandatory and which auditors do ask about.
The Principal Employer Lens
Manufacturing employers are almost always principal employers. Everything above lives in our contract labour module, licensed separately from payroll — so you can run this alongside SAP, Darwinbox, greytHR or whatever pays your own staff today, with no rip-and-replace.
See the full principal employer viewSector proof
Your plants are probably in Maharashtra, Gujarat, Tamil Nadu, Karnataka, Telangana, Haryana or Uttarakhand. Check each one on the coverage matrix before you talk to us — including where we compute and evidence rather than generate a return file.
Honest limits: What we do not do for manufacturing
We state our operational scope upfront so there are no false assumptions during deployment.
- We do not run your contractors’ payroll. They do, and they should — that is what makes them the employer. We check what they report against what the statute required.
- We are not an EHS or safety-incident system. Factory safety statutory obligations appear in the compliance register as obligations; incident management itself is not ours.
- We do not do production planning, MES or shop-floor scheduling. Shift rosters for your own workforce, yes. Manufacturing execution, no.
- India only. Our statutory engine is built specifically for Indian labour laws, state amendments, and New Labour Codes.
Start with the number, not the software
Send three months of contractor invoices, your gate or biometric attendance, your plant list with states, and the challans your contractors gave you. We return claimed versus statutorily eligible, per contractor, per plant — and your residual exposure, sized.