Financial services institutions rely heavily on outsourced and third-party staff for security, data entry, collections, sales, and maintenance—creating a large, constantly rotating contract workforce. Under labour law, the Principal Employer (the Bank or NBFC) is fully liable if the contractor fails to pay Minimum Wages or remit EPF/ESIC for any worker deployed under their supervision or premises. This exposes institutions to serious financial penalties, back-wage claims, and reputational damage. Effective contractor compliance oversight is therefore essential to protect the organization from systemic risk.

The upcoming Code on Wages and Code on Social Security will fundamentally reshape compensation structures in the banking and financial sector. With the new mandate that Basic Wages must form at least 50% of total remuneration, institutions that currently rely on high allowances and low basic pay will see a sharp rise in EPF and Gratuity liabilities. This shift can increase statutory provisioning by millions and requires a complete payroll restructuring to remain compliant. Without proactive alignment, banks and NBFCs risk major financial impact, audit complications, and long-term compliance exposure.

Banks and NBFCs face high Principal Employer liability when vendors fail to remit EPF/ESIC for outsourced staff. Our Real-Time Vendor Compliance Assurance system embeds a mandatory compliance checkpoint into the vendor payment workflow. Before any invoice is cleared, vendors must submit their EPF ECR, ESIC challan, and monthly wage register. The tool then performs an automated cross-check to verify that the number of workers billed matches the number actually covered under EPF/ESIC. If any mismatch or default is detected, the system generates an instant Deficit Report, enabling the institution to withhold the unpaid social security amount from the vendor’s bill and remit it directly to EPFO/ESIC—eliminating liability for the Principal Employer and ensuring airtight compliance.

The upcoming New Labour Codes will significantly increase PF, Gratuity, and Bonus outflows by enforcing the 50% Basic Wage rule. Our Labour Code Readiness Assessment simulates this financial impact across every salary band, allowing banks and NBFCs to see the exact rise in statutory liabilities. We then help redesign salary structures before the codes take effect—preventing sudden financial shocks, ensuring compliance, and avoiding employee dissatisfaction during the transition.