4. Differences in Benefit Entitlement

Apart from availing maternity benefits as per the provisions of the Maternity Benefit Act, 1961, an independent contractor is not statutorily entitled to any other statutory benefits which an employee is typically entitled under law. It is the terms of the agreement for service that solely govern the understanding between an organization and an independent contractor.

In contrast, employer-employee relationships, employees are entitled to all statutory benefits. The benefits include, but are not limited to, provident fund, pension scheme and deposit-linked insurance scheme, employee state insurance, workman’s compensation, gratuity, statutory bonus, maternity benefit, leaves and holidays (either under central or state-specific laws) etc. It is imperative to note that in case of contract labourers, it is the responsibility of the contractor to ensure that the employees are receiving these benefits. It is only in the event of any default or failure of the contractor that the principal employer is held responsible.