Pf & esi eligibility - social security.. CiteHR

manjula17 Started The Discussion:

Dear All,
I am working in a call centre. There is a high attrition rate. We pay pf and esi and the employee leaves the organisation. Want to know if an employee can be taken for 3 months on salary basis without pf & esi deduction. Please help.

Ganesh Chavan -  Member Since: Jul 2008
Dear Manjula,

No, you can't take them on salary basis without Pf or Esic,It is mandatory to employer to pay PF & Esic of each and every employees.Some employer not showing new employees on muster & also not deducting Esic, PF & P-Tax from their wages for two to three months.You can go for same,but this is wrong practice.

saiseven -  Member Since: Dec 2011
If you take them as trainees for three months on payment of stipend, you need not pay P.F contribution but you need to pay ESI contribution. B.saikumar Hr & labour Law advisor. mumbai

manjula17 -  Member Since: Feb 2012
Thank you Ganesh and Saikumar for your advise. What if I take them as Apprentice. Still I have to cover them under ESI and PF. Manjula

saiseven -  Member Since: Dec 2011
In fact I want to modify my reply. Since the Standing orders Act is not applicable to you as youa re not an industrial establishment within the meaning of standing orders act, even if you appoint them as trainees, iam afraid, you can escape from liability even under P.F. The better option is to appoint them as apprentices under Apprentices Act 1961(if the Act icovers your establishment) since they are not covered both under P.F Act and ESI Act.

Hr & Labour Law advisor

Ganesh Chavan -  Member Since: Jul 2008
No you can't take any outside employees as an Apprentice,There are some Government ITI institute from whom you can take the candidates as a Apprentice for the said period and Within seven days from the date a trade apprentice joins an establishment, the employer shall prepare the return in form Apprenticeship 4 in Schedule-III in duplicate and shall submit one return to the Regional Director or State Apprenticeship Adviser as the case may be, and the other to the Principal or Head of the Institute where Basic Training or Related Instructions shall be imparted.

But most probably Apprentice are taken in manufacturing unit for technical position for giving Basic Training or Practical Training.

umakiranmai.k -  Member Since: Sep 2011
hi all, i need to know about pf & esi benefits of employees .when they will eligible for these pf & esi . plz let me know.. thanks & regards, uma

derek_dgomes -  Member Since: Aug 2005
You can make there Basic salary above 6500 so PF will not be eligible for them & you can make their gross salary above 15,000 p.m. then you need not pay for PF & ESIC

Hope it's of help.

Regards, Derek Gomes

driveme -  Member Since: Apr 2009
I totally agree with Ganesh Chavan regarding "Apprentice".

Good suggestion "You can make there Basic salary above 6500 so PF will not be eligible for them & you can make their gross salary above 15,000 p.m. then you need not pay for PF & ESIC".But you should pay the Admin Charges of both social Security Acts,

Their is no other Option available.


Ganesh Chavan -  Member Since: Jul 2008
Dear Gulanar, In my organization, Probation period for new employee is Six months,but company has right to extend it. It varies from company to Company.


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