HRMS software for construction companies

How is the construction welfare cess calculated now?

Section 100 of the Code on Social Security levies a cess for the social security and welfare of building workers at a rate between one and two per cent of the cost of construction incurred by the employer, as the Central Government notifies. The cost of construction excludes the cost of land and any compensation paid to an employee or their family under the Code's employee compensation chapter.

The cess is collected from every employer undertaking building or other construction work, in the manner the Central Government prescribes, including deduction at source on government and public sector projects and advance collection through the local authority where its approval is needed. It is a project cost, not a payroll deduction, but it sits with HR and finance at the same time as the labour records that support it. The cess glossary entry explains how it differs from a tax.

Who is responsible for subcontractor workers on site?

The principal employer owes welfare facilities and any wages a contractor fails to pay, once the contract labour provisions of the OSH Code apply. They apply where fifty or more contract workers are employed on any day in the preceding twelve months, counted across contractors together. Construction is layered, with a main contractor, specialist subcontractors and labour contractors beneath them, so even a mid-sized site crosses the line at peak.

Civil and other constructional works are one of the eleven categories excluded from core activity, which is why a factory can hire a contractor to build its new shed. For a construction company, building is the core activity, and the exclusion does not apply where the establishment is set up for that work. Relying on contract labour then depends on the exceptions in section 57. Whichever applies, the principal employer's duties on welfare and unpaid wages remain. The contract labour glossary entry explains the core activity test.

What changes for inter-state migrant workers?

The Inter-State Migrant Workmen Act, 1979 was repealed by the OSH Code, which now carries the provisions on inter-state migrant workers. For HR, the practical work is the same as it always was: an accurate record of who each worker is, where they came from, which contractor engaged them, and what they were paid, held somewhere other than a site register that leaves with the site engineer.

Engage gives every worker an employee record with identity documents, contractor and site, and a payslip on their phone. Wages paid by bank transfer leave a trail that cash never does, and the Code requires contractors to pay contract labour electronically.

How should overtime and rest days be handled on site?

Site overtime, routine near handover, is paid at not less than twice the normal rate of wages under the Code on Wages, and the OSH Code and state rules set hour limits and weekly rest. Working on a weekly rest day is governed by the substitution rules, and a compensatory off is not always an adequate substitute for premium pay.

In Engage, overtime is calculated from the punch data against each site's shift and approved by the site in-charge on mobile. Comp off can be granted and tracked as a leave balance, so an unused balance is visible before it becomes a claim at exit.

What do you owe workers when a project closes?

Anyone who leaves when a site winds down must be paid their dues within two working days under the Code on Wages, and the Industrial Relations Code, 2020 governs retrenchment where employment ends because the work has run out. Others move on to the next project. Engage moves employees between project locations without breaking their service record, and runs full and final settlement for those who leave, with gratuity, leave encashment and recoveries calculated together.