As I know, EPF is applicable to all employees drawing salary less than Rs 6,500/-.
Recently we have recruited one Diploma Engineer Trainee with a consolidated stipend of Rs 11,000/- per month for six months, thereafter based on his performance he will be absorbed. My management says there is no need to deduct EPF for this person as he is only a trainee. it is pertinent to mention here that PF is deducted for all staff of our company irrespective of their salary.
When I contested them that only the trainees who are taken under Apprentice Act are exempted from EPF, my boss says I am wrong.
Can any one of you with your vide experience be able to clarify with authority whether the trainees drawing stipend are eligible for EPF or not.
Very recently the slab for ESI deduction was increased to 10000. So you need not deduct ESI from the new trainee.
[/i]The Act was originally applicable to non-seasonal factories using power and employing 20 or more persons; but it is now applicable to non-seasonal power using factories employing 10 or more persons and non-power using factories employing 20 or more persons.
Under Section 1(5) of the Act, the Scheme has been extended to shops, hotels, restaurants, cinemas including preview theatre, road motor transport undertakings and newspaper establishment employing 20 or more persons.
The existing wage-limit for coverage under the Act, is Rs.10,000/- per month (with effect from 1.10.2006)."[i]
So, every person whether Trainee or part time employee or anyone Except one appointed by Apprentice Board is covered under this Act.
your boss is right that, ESI is not to be deducted from his salary-because his salary is more than the Wage-limit for coverage.
Thanks & Regards
AN APPRENTICE IS CONSIDERED TO BE APPRENTICE UNDER THE APPTENTICE ACT WHEN IT HAS BEEN DEPUTED BY THE BOARD OR AUTHORITY UNDER THE SAID ACT.
UNDER THIS SITUATION EPF IS NOT APPLICABE TO THE APPRENTICE AND NO DEDUCTION WOULD BE MADE IN THIS BEHALF.
HOWEVER IF THE TRAINEE DOES NOT COME UNDER THE MENTIONED SITUATION THAN HE WILL BE TREATED AS THE USUAL EMPLOYEE AND IS LIABLE FOR PF & ESI.
AS YOU MENTIONED THAT HIS TOTAL STIPEND IS RS. 11000.00 SO IN THIS CASE YOU CAN SHOW ITS BASIC SALARY MORE THAN 6500.00 AND GET PF FORM NO. - 11 SIGNED BY HIM AND THAN YOU CAN AVOID HIS PF DEDUCTION.
I want to express my disagreement with Mr. Sanjeev Sharma.
As per my knowledge is concern ESI is paid on total salary (or whatever the name may be) and not on Basic + DA.
"Nature of Work" has a great importance in calculating Applicability of ESI of Employees.
If a person works within the premises of an organization (Full time/Part time), and collect his compensation in his name (even if stipend -not in the mane of a firm/company), Employer must deduct ESI from his remuneration.
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