QUERIES
for taking a Trainee on Stipend for a duration of 3 months be applicable for ESI or PF. The stipend is Rs 15100/- per month.
The training may be extended or terminated after 3 months. Else the Trainee maybe absorbed on roles in which case will pay PF above 21k.

10th November 2017

PARTICIPATING IN DISCUSSION:
Dinesh Divekar
Business Mentor, Consultant And Trainer
Honeyanshi
Sr General Manager (hr And Admn)
Srinath Sai Ram
Hr Manager
Milee Mathew
Hr Executive

Dear Milee,

You have given some information about hiring trainees in your organisation. Nevertheless, what is your query?

The only thing that I find anomalous is usage of the word "stipend". Stipend is paid under the provisions of Apprentice Act 1961. The minimum amount is decided and revised every year by the Govt. However, employers have liberty to pay more than what is stipulated. Stipend is paid to the apprentices. They are not employees, either regular or contractual. Provisions of ESI Act are applicable for apprentices.

On the other hand, salary is paid to the employees. Employee could be regular, temporary, fixed term or contractual. Rules of payment of monthly salary are governed by Payment of Wages Act, 1936, Shops or Establishment Act or Factories Act etc.

In your case you are not hiring apprentices under the provisions of Apprentice Act hence usage of the "stipend" is improper. What trainees will get is salary.

Thanks,

Dinesh Divekar
10th November 2017 From India, Bangalore
Dear Milee ,

In addition to above, if any trainee comes under training scheme approved along with your company's standing order. They are not treated as on roll employees and not entitled for any benefits like PF , ESI, and Bonus etc. but covered them under accidental insurance act .
11th November 2017 From India, undefined
Dear Milee, with specific reference to your post"Else the Trainee maybe absorbed on roles in which case will pay PF above 21k."
you are recruiting Employees initially as "Trainees" with Stipend.Such of the Trainees come under the definition of Employee under EPF & ESI Warranting coverage under relevant Acts.Only Apprentices Appointed under The Apprenticeship Act & Interns undergoing Internship during their Study are exempted from coverage under EPF & ESI
You are recruiting Trainees for your regular work consequently they come under the Definition of Employee
11th November 2017 From India, New Delhi
Dear Srinath,

You have written that stipend paid to the apprentices under the provision of Apprentice Act is exempted from PF and ESI. I had similar view earlier. Nevertheless, it was corrected about five years ago by another member of this forum. Please check the following link to refer the reply:

https://www.citehr.com/423069-differ...ml#post1917634

Thanks,

Dinesh Divekar
11th November 2017 From India, Bangalore
Dear Dinesh Sir, you are right. As per ESI (Amendment) Act, 2010
 APPRENTICES COVERED:  
Benefits under the scheme have also been extended to Apprentices and Trainees Employed under Apprentices Act and Standing Orders Act.
For the information of all concerned, said ESI Act is attached herewith.Error is regretted 
11th November 2017 From India, New Delhi

Attached Files
File Type: doc Employees State insurance (Amendment) Act, 2010.doc (28.0 KB, 43 views)
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