Pf Query- Stipend Issue

Hi Ms. Neha,

I will not take a different view, but i would like to streamline the discussion :

1.Before taking any ‘Trainees’, (as Mr. Mallik Sir has quoted), you have to register under ‘Apprentice Act – 1961’ and take a consent from the Apprentice Advisor . Otherwise paying money in the name of stipend will raise questions from the Labour department.

2.As you have detailed in your case – when you are paying a stipend, it is a ‘Stipend’ and not a regular ‘Salary’. Hence question of paying a PF / ESI amount during their training period doesn’t arise. But, however, the PF & ESI comes into place as soon they are absorbed (if) into the company’s regular rolls, right from the day One. ( I agree with Mr. Katri regarding this matter)

3.But even if ESI, doesn't apply, ‘Workman Compensation Act’ will be applicable to the trainees from their day of joining.

I hope I will rest all fears in this matter.

With regards,
Jayesh Yohannan

Dear neha,
mr malik is very senior and having lot of experience, he has rich experience in ir matter ....... So no dout ..............his advice is absultly right....... I am confident on him...........and also agree...

For ESI deduction on stipend, model standing order can be displayed and get it approved by ESI department is enough to avoid ESI. Standing order can be made with minimum 100 employees/trainees.
sudarshan

Hi Mr. Ramakrishna
Employees whose basic salary is less than Rs.6500/- are eligible for PF deduction under the act, ask ur HR people for ur break ups. If BASIC is less than 6500/- than ur eligible for PF

Trainees are also part of employee. now it depends on how you divide you salary structure if his/her basic+DA is less than Rs. 6500/- than you are obliged to deduct thier P.F. if the Basic + D.A is more than the prescribed limit of Rs. 6500/- than there is no requirement to deduct the P.F.

We have appointed a trainee for stipend of Rs 15000/- pm and after 6mths depending upon his performance we might absorb him in our company. Please advise if his stipend is applicable for PF deduction or not?

Dear Neha,
It seems the way ur company is appointing the trainees are not transparent. Trainees if absorbed after a year should attract PF as per SC judgement. However if the basic plus DA is more than 6500 they will be treated as "Excluded" employees and will not come under the purview of PF.