A manpower agency becomes part of your compliance the day its workers enter your gate. If it fails to pay wages, the law can make you pay them. If it skips PF or ESI, the people working at your site lose their cover. So it is worth spending an hour checking an agency before signing, and a few minutes every month after. This is the list we would use ourselves.
Registrations and licences
- Contractor licence. Under the OSH Code, a contractor employing 50 or more contract workers must hold a licence, valid for five years. Ask for a copy and note the expiry date. A contractor working in several states may hold a single all-India licence.
- Establishment registration. Every establishment with 10 or more employees must be registered electronically under the OSH Code.
- EPFO and ESIC codes. Ask for both and the date of registration. An agency with no ESIC code cannot be covering its workers under ESI.
- Professional tax (PTRC). In Maharashtra an employer deducting professional tax from salaries registers for a PTRC number with the state tax department.
- Labour welfare fund. Maharashtra employers contribute every six months for employees on the register on 30 June and 31 December, paying three times the employee’s share.
Proof of last month, not promises
Ask for one recent month of real paperwork for an existing client, with names masked if needed:
- The PF return and challan, and the ESIC challan, for that month
- Wage slips, which the Labour Codes require for every employee on or before payment
- The attendance register cum muster roll and the wage register, which may be electronic and are kept for five years
- A sample appointment letter, which the OSH Code requires for every employee
Then check the dates. Under the Code on Wages, monthly wages are due before the end of the seventh day of the following month. An agency that regularly pays later is either short of working capital or paying its workers last; either is a risk for you.
Wages and the rate card
Check that the agency’s quoted rate can actually carry the minimum wage notified for the role and zone, plus the employer’s PF and ESI shares, bonus, leave, overtime where it applies and the agency’s fee. Since 17 September 2026, compulsory EPF coverage extends to employees earning up to Rs 25,000 a month, and ESI covers those earning up to Rs 21,000. A rate that looks far cheaper than everyone else’s usually means one of these is missing.
Also check how the salary is structured. Under the Labour Codes, if allowances exceed half of total pay the excess is added back to wages for PF and other calculations, so a structure built to keep PF low no longer works.
Contract clauses worth reading
- Replacement: how quickly a worker who leaves or does not fit is replaced, and at whose cost
- Monthly compliance documents: which ones the agency hands over, and by what date
- Wage payment proof: your right to see it every month
- Liability: who bears the cost if wages, PF or ESI are found unpaid
- Exit: what happens to the workers and their dues if the contract ends
Ask about people, not only paper
Clean paperwork is necessary, but it does not tell you whether the right people will turn up. Ask how the agency finds candidates, how it checks identity, documents and references, and whether it tests the trade itself before sending someone, for example a practical test for a welder or a CNC operator. Ask who supervises their workers on your site, how absences are covered on the day, and whether they report joining, absence and exits to you every month.
Ask, too, for a reference from a current client of a similar size, and call them. One question tells you most of what you need: “When something went wrong, how quickly did they fix it?”
After you sign: a five minute monthly check
- Wage payment proof dated on or before the seventh of the month
- PF and ESIC challans for the month
- The names on the challans match the people at your gate
- New joiners registered for PF and ESI
- The contractor’s licence still valid
Signs to walk away
- No ESIC code, or PF covering only a few of the deployed workers
- Reluctance to show any paperwork from another client
- Wages paid in cash with no wage slips
- A rate below what minimum wage plus statutory contributions can support
- Workers asked to pay the agency for the job
We would rather be checked than trusted on our word. Ask us for any of the above, or see how we work on the compliance page.
This is a plain summary for general information, not legal advice. Laws, rates and limits change; check the official source before acting on a figure.
Sources
- Ministry of Labour and Employment: Compliance Handbook for Employers under the Four Labour Codes (February 2026)
- Ministry of Labour and Employment: FAQs on Labour Codes (30 December 2025)
- MAHAGST: Registration under the Maharashtra State Tax on Professions, Trades, Callings and Employments Act, 1975 (PTRC)
- Maharashtra Labour Welfare Fund (Amendment) Bill, 2024, as published by the Government of Maharashtra
- Ministry of Labour and Employment (PIB, 16 September 2026): EPFO wage ceiling raised to Rs 25,000
- ESIC: Standard Note on the Employees’ State Insurance Scheme as on 1 January 2025