Introduction

Many enterprises are now focusing on tightening control over contract workforce operations across multiple manufacturing facilities. In a typical setup, attendance is captured at the gate while payroll still runs on Excel, and the two are not connected. This is where practical gaps start to show: payroll closure gets delayed due to rework, day-wise work verification stays weak, headcount inflation surfaces late during invoicing, and statutory processes remain manual and audit-sensitive. At the same time, many tools claim to “manage contract workers,” but they define management very differently. This guide lists the capabilities that matter most, in priority order, so you can evaluate platforms systematically and choose what fits your operating reality.

The Evaluation Framework

Priority 1: Does It Handle Mixed Workforce (Permanent and Contract)?

This is your first screen. If the software treats contract workers as a bolt-on category or requires separate modules, skip it. You need a single system that handles both seamlessly.

What to look for:

• Same system manages both employee and contract worker data

• No extra setup or different workflows for each type

• Payroll calculation is smart enough to know: this worker is permanent (monthly salary), that worker is contract (daily wage)

• Reports show both together without confusion

Red flag: “Our platform is designed for traditional employees. Contract workers would need a different module.”

Priority 2: Real-Time Payroll Integration

Your biggest pain point is a 3-day payroll delay. The right software should sync attendance to payroll same-day, with discrepancies flagged automatically.

What to look for:

• Attendance is recorded (biometric, mobile, manual) into the system

• Payroll engine reads this data automatically same-day

• System validates: Does attendance data match payroll? (If attendance shows 8 hours, payroll should calculate 8 hours of pay)

• Discrepancies trigger an alert, not a silent error

• PF/ESI deductions are calculated automatically based on actual days worked

Test this during evaluation: Ask for a live demo. Mark attendance for a test worker at 2 PM. By 4 PM, verify the payroll has been updated.

Red flag: “Payroll is processed once a week” or “You need to manually export attendance and import into payroll.”

Priority 3: Contract-Specific Compliance

Contract workers have different compliance requirements than permanent employees. The software must handle this automatically.

What to look for:

• Minimum wage validation per state (states have different minimum wages, software should know yours)

• Continuous presence tracking (alerts if a worker exceeds 48 hours per week, which violates Factories Act)

• ESIC eligibility calculation (worker becomes eligible after 120 days; system tracks this)

• PF contribution rules for contract labour (different from permanent employees)

• Muster roll generation that matches contract labour requirements (not employee requirements)

• An offboarding workflow that locks the worker immediately and prevents future payments

Test this: Ask the vendor: “How does your system handle a contract worker who worked 25 days but earned only 12,000? How does it ensure they are not underpaid on minimum wage?” If they cannot answer clearly, they do not have contract-specific logic.

Red flag: “Compliance is the same for all worker types” or “You handle compliance manually.”

Priority 4: Vendor Invoice Cross-Check

You mentioned contractors inflate headcount. The software should catch this automatically.

What to look for:

• Before paying a contractor invoice, the system compares:

• The invoice claims 50 workers

• Attendance records show actual worker days

• System flags: “Invoice claims 50, but only 45 workers marked attendance”

• Supervisor can approve or reject the discrepancy

• Payment is not processed until reconciled

Test this: Simulate a scenario where a vendor bills for 10 workers but only 8 marked attendance. Ask the software how it handles this.

Red flag: “Invoices are processed and attendance is tracked separately.”

Priority 5: Geo-Fencing and Mobile Attendance

Your contract workers are on-site, but you want location verification to prevent fake attendance.

What to look for:

• Biometric machines at work zones (not just gate)

• Mobile app with GPS for workers who work field operations

• System blocks attendance punch if worker is outside geofence

• Audit trail shows: timestamp, location, biometric match, worker ID

Decide: Do you need this? If workers are factory-based and well-supervised, maybe not. If they are distributed or field-based, absolutely.

Red flag: “We only have gate-level biometric, no zone-level.”

Priority 6: Multi-Location Support and Real-Time Reporting

You have 3 facilities. You need visibility across all of them, same-day.

What to look for:

• Single dashboard shows attendance across all facilities

• Payroll calculated per facility with facility-wise breakdowns

• Compliance reports aggregated across facilities

• Supervisor at facility X can see only facility X data (privacy), but head office can see all

Test this: Log in as a facility supervisor and head office manager. Verify permissions work as expected.

Feature Comparison Table: What to Look For in Each Category