Only apprentices who are engaged as per Apprentice Act, 1961 are exempted from coverage. The trainees should have been selected for training following the guidelines in this regard only. The stipend at the rates prescribed by the Central Govt. should be paid by the employer. Normally, the period of training will be for one year and there will be a contract of apprenticeship training entered into between the employer and the trainee in the presence of the guardian of the trainee. Such trainees are to report to the Related Instruction centre once in a week for theory classes and therefore, you will get them for 'work' only for 5 days, the day on which they should report at RI Centre should be marked as present for payment of stipend. Besides, they are not suppose to work overtime without permission from the Apprentice Adviser.
The test of whether your trainees are apprentices or not is the agreement executed in this regard and the relevant orders of the District Apprentice Adviser / ITI/ RI Centre. Such trainees are treated as undergoing their practical classes which is mandatory for them to appear for National Trade Apprentice Test.
All other trainees, even if you call them as apprentices, will be covered by ESI. You are expected to deduct and contribute ESI contribution at the same rate as is applicable to other employees even if you call the remuneration being paid to these trainees as "stipend".
Regards,
Madhu.T.K