Madhu.T.K
Industrial Relations And Labour Laws
Jeevarathnam
Sr. Manager Hr/admin
Kuldipsri28
Self Employed
Rdsyadav
Educator, Management Consultant & Trainer
Rajesh Kumar Dubey
Manager - Hr
Ramnathmsw
Hr Officer
+3 Others

Hi,
An IT Company in Karnataka have appointed two employee and they are under going training provided by the Company but company is paying them below minimum wages. Once there training completes company will increase their salary. How to handle this matter? Should PF be deducted for what they are receiving as salary?
or there may be any non compliance as their salary is below minimum wage?
Please suggest me with detail.
If at all any employee is under going training as internship then there is no need to contribute EPF.
If they are hired for job & if they are under going any training then company has to pay the wages with respect to the minimum wage act. Wages shall not be less than minimum wages.
In this case both ESI & EPF is applicable as they are employees of the organisation.
Any clarifications please do reach me
The employee on training are treated as apprentice and minimum wages epf and esic rules are not mandatory for apprentice
Apprentice is applicable for the organisation which registered under Apprentice act.
How can any organisation hire the engineers/graduates who passed out from the academics & hire them as trainee & post training they will increase the wages?
It is clearly mentioned as they are appointed as employee but providing training for freshers
Swetaabhishek, does company appointed them officially and take them on their payroll..did company has given them appointment letter
Bharat Sanchar Nigam Limited vs. Union of India and Others 2015 LLR 893
It was held by the HC that the provisions of Employees’ Provident Funds and Miscellaneous Provisions act, 1952 include every person including apprentices or trainees within the purview of definition to the expression ‘employee’ except those engaged under the Apprentices Act, 1961 or Standing Orders.
If it is not explicitly mentioned in the offer document that the intern is a trainee as per the standing orders. PF could be attracted.
Pls hire them under stipend as trainees. There are no statutory deductions under stipend mode Post training we can move them to CTC mode along with salary hike subject to Minimum wages
As Jeevaratnam has said except apprentices engaged following the Apprentice Act, 1961, all trainees by whatever name they are called and by whatever form their remuneration is paid, should be paid minimum wages and contributed PF, ESI etc. They should also be paid bonus at par with other regular workers if they have worked for the minimum qualifying days (30 days) in the preceding financial year. The period of training should also be considered for their gratuity eligibility and calculation.

If the law in this regard is diluted, there will not be any skilled workman in any organisation but everyone will manage the entire show with trainees only. There will not be any theory classes as are required as per Apprentice Act. You will also engage the trainees in the second or third shifts and ask them to do overtime. These are other tests to distinguish an apprentice under Apprentice Act and trainee engaged without following the said Act.

You need to extract work or labour but cannot give what the labourer is eligible to. This is unfair.

Madhu.T.K
Dear Friends
If any person is being engaged on [Internship] in any department and for specific period , they need not to covered under EPF or ESI.
Further if any person are engaged as Trainee on Company Rolls or Contractor's Roll even a single day, and being paid as Stipend or Salary, their wages attract EPF and ESI Contribution by the PE unless If PE has engaged those person are enaged under Apprentices Act and for Specific Period prescribed and provisioned under the Apprentice Rules Applicable.
There are no matter of Minimum Wages in case of Apprentices because they are paid Stipend as per their Own Rules on Years basis.
Thanks
An intern is different from trainee. An intern is not paid salary or stipend. An intern is doing his training or internship as part of his curriculum. This is certified by the Principal of the institution. You will not give an appointment order to an inter which say that after a specified period of time your stipend will be increased!! Under an internship arrangement, there will be a company guide and a faculty to whom the intern reports periodically. In training arrangement there is no such reporting but the trainee directly reports to the officer to whom all other regular workers report.

The above things clarify that the employee in question is not an intern but a trainee only. I don't think that any IT company will engage apprentices from RI centres following Apprentice Act when they are afraid of the existing and mandatory labour laws. Such kind of engagement is very common among industries who need Welders, Fitters, Machinist, Turners etc but not in IT sector mainly because the trade they are looking for may not be available in ITIs.

Madhu.T.K
Dear Friends,
If any person is being engaged on [Internship] in any department and for specific period , they need not to covered under EPF or ESI.
There are matter of Minimum Wages. As per Apprentice rules, we have to pay Stipend-
Stipend for First year:- Semi-skilled wages of 70%
Stipend For Second Year:- Semi-skilled wages of 80%
stipend for third year:- semi-skilled wages of 90%
Above Stipend change if Minimum wages revision ( April & October).
Regards
Rajesh Kumar Singh
KULDIPSRI28@ yes company appointed them officially and mentioned in their offer letter designation as "TRAINEE ENGINEER" with CTC which is less than minimum wages.
Should they be treated as employee or trainee?
dear seniors, if one the employees salary is upto 19500(gross salary) and his basic is 5000/- then how to calculate DA And HRA? please clarify my doubts
I think the matter is very clear and it is not the designations that you give but the functional responsibilities that decides whether a person employed is a trainee or employee. It is very clearly stated that only persons engaged following Apprentice Act will be excluded from labour law provisions. Unfortunately SwtaAbhishek is raising the same question without giving a reply to our question whether he was engaged through RI centre or through the Apprentice Advisers or simply by the company only. I have also given some tests which establish the existence of employer employee relationship. To make it very clear, if your Trainee Engineer was appointed through the Apprentice Adviser, Central or State, following Apprentice Act, on a stipend declared by the Central Government from time to time, with specific provisions which restrict their employment during night shifts and overtime working and with a clause that you cannot take any disciplinary action against the apprentice without informing the Apprentice Adviser, then your trainee is an Apprentice and no need to follow Minimum Wages Act or any other labour Acts. Please clarify

Madhu.T.K
swetaabhishek ji then company has to follow all statutory compliance’s for said employee
kokitkark.T.K. first of all basic salary should not be less then 60% of gross salary
Dear KOKITKARK,
Salary break-UP, formula depends on city (town)
General Practice salary break up formula is
Basic = (50% of gross salary) & DA is part of Basic.
HRA=(60% Of basic)
Conv.=Left of salary 40 %)
phone=(Left of salary 25%)
Special.Allow.=Left of salary 35%)
Above Break-UP depends on company to company.But in general Practice we follow above formula.
Regards
Rajesh
Dear seniors, Company has appointed them with the designation as "Trainee Engineer" they are not under Apprentice Act as employee is not engaged through RI centre or through the Apprentice Advisers.
Dear swetha plz follow as per mr madhu & jeevaratnam, they have clearly explained. I think there must be no doubt now.
Dear Seniors ,
I have one doubt its regarding a termination of the Employee. if one of the employee is working in his position but company's want to terminate to this employee then how it could be possible?
Your problem is not clearly written .Do you want to know that can a company terminate trainee ?
Yes, services of trainees / probationers etc can be brought to an end before their training/ probation period also and certainly after that in accordance with the relevant terms of their employment.The cardinal principle of employment is service terms as agreed by him and management . Employee must learn and deliver always higher and higher output and in case its not there then employer with exercise of fundamental rights and framework does take actions like termination of services of employees if some one found below accepted level of performance.
Regds,
RDS Yadav
Director-Future Instt. Of Management and Technology
Labour Law Advisor
navtaranghrs@gmail.com
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