Understanding PF & ESI Norms for Trainees and Employee Benefits in Compliance with Labor Laws

Hi,

Good day to all members. This is my first post on Cite HR. I have a query regarding PF & ESI norms for new joiners. My question is, if I recruit a skilled person as a trainee, should I have to provide PF & ESI benefits immediately from the date he/she joins, or is there any flexibility in not enrolling them in PF & ESI for say 6 months to 1 year?

Please, seniors, help me in this regard.

Thanks, Rohinideepak

Dear Rohini,

Actually, our intention is not good, and we want to escape from ESI and PF. If a trainee will get an exemption from ESI and PF, then everyone will give this designation to their employees. Now, ESI and PF are applicable from day one. The employees hired through an apprenticeship advisor on a stipend as a trainee are exempted from ESI and PF.

Secondly, if you have a provision in your standing orders to hire trainees as per the standing order, you are paying a stipend to them, then also they can be exempted from ESI and PF.

Regards,

J. S. Malik

Dear Sir,

Thank you very much for your reply. Our intention is not to escape from PF and ESI, sir. My employees are claiming that they do not wish to be included in PF and ESI. As an HR professional, I just want to know whether we can do it for the sake of the employees.

I understood from your reply that PF and ESI exemption is applicable if we hire trainees and pay stipend. Am I right, sir?

Rohini

Dear,

It is exempted if you are hiring as per provisions of standing order or through an apprenticeship advisor.

Regards,
JS Malik

Dear Sir,

Thank you very much for your reply. Our intention is not to escape from PF and ESI, sir. My employees are claiming that they do not wish to be included in PF & ESI. As an HR professional, I just want to know whether we can do it for the sake of employees.

I understood from your reply that PF and ESI exemption is applicable if we hire trainees and pay stipend. Am I right, sir?

Rohini

Dear Rohini,

On one side, you mentioned the need for skilled workers and expressed an interest in hiring them as trainees. However, there are limitations on hiring trainees or apprenticeships. How can you hire trainees or apprenticeships without the consent of an adviser or institution? I believe skilled workers do not necessarily come directly from an institution. Please refrain from hastily engaging trainees or apprenticeships; otherwise, your company may face legal issues concerning unauthorized trainee or apprentice workers. Employees have no desire for deductions; always ensure compliance with the law.

Best Regards,
Sajid Ansari
Delhi

Hello, friends. I am delighted that my article regarding negative workers still has relevance. As you are all engaged in the new world industrial/commercial age, please allow me to offer some tips.

If you are not satisfied in your work, that indicates you possess aspirations that you should embrace by always keeping an eye on what else might be available in the workforce, regardless of your apparent security and satisfaction. Be extremely careful about your personal/work email, as they can be observed by others. (And like my father said, never discuss anything on the telephone you do not wish others to know; use regular mail). Always pursue special training opportunities to become certified in fields of your interest and always know that someone may express their competitiveness by causing harm to you. Be careful about whom you trust and never engage in gossip!

Cheers,

Mary Helen Yarborough, USA

We are planning to start the health care centers on our own. In our organization, we will have the manpower from Centre Manager/Front Office Staff/Laboratory Staff/Marketing/Security/Housekeeping, etc. Approximately, in one center, we will have between 15 to 25 employees.

Do we need to cover the PF and ESIC for our employees? If so, please provide the details on the PF and ESIC regarding how to register ourselves and what norms to follow.

Dear Rohini,

There are actually two types of trainees to be engaged in an organization:
1. Trainees under the Apprentice Act
2. Trainees under certified Standing Orders.

These trainees are exempted under the ESI and EPF Acts.

On the other hand, merely giving the designation of trainee to an employee cannot exempt them from the coverage of ESI/EPF. The applicability of ESI/EPF starts from the first day of joining; there is no waiting period.

Please check whether you are going to recruit actual trainees or just assigning them the trainee designation.

Thanks,
Mohd. Arif Khan

Malik sir,

Is it possible to calculate one's PF and pension amount at the time of withdrawal? If it is possible, please send me the calculation formula for it.

Regards,
Yogi

Dear Rohini,

Please go through the below notes:

Holding that trainees are not employees, the Supreme Court has ruled that they are not entitled to provident fund.

A Division Bench of Justice Arijit Pasayat and Justice R V Raveendran held that trainees were apprentices engaged under the Standing Order of an organization under the Apprentices Act. Therefore, employers were not obliged to contribute to the Provident Fund for them.

The Bench upheld a Karnataka High Court order, quashing the petition of Regional Provident Fund Commissioner, Mangalore, asking Central Arecanut and Coca Marketing and Processing Cooperative Limited (CACMPCL) to contribute provident fund for 25 trainees at its chocolate factory in Puttur.

Trainees, who are paid a stipend during the training period, have no right to employment, and it is for the employer to offer or not to offer a job to them, it said.

The court clarified that though the term 'employee' under the Provident Fund Act includes apprentices, these apprentices, engaged under the Apprentices Act, under the standing order of an organization, were excluded from it.

The court said, "In the case at hand, trainees were paid a stipend during the period of training. They had no right to employment, nor an obligation to accept any employment if offered by the employer. Therefore, the trainees were apprentices engaged under the standing order of the establishment."

Regards,

Dinesh Bhansali

dinubhansali@gmail.com

9892783763

Dear Receiver,

Actually, an employee, whether regular or contractual, is eligible for PF/ESI benefits. It is clearly mentioned in Labor Laws, PF Act, and ESI Act.

Rgd
Bhagwan Tolani
+919784539090

Dear Mary,

Could you please guide me in increasing competency in the HR domain? I would like to make a transition in training from core HR.

Regards,
Amit

Dear All,

Please clarify for me whether a General Insurance Company falls under the purview of ESI, since all employees are drawing wages more than Rs10,000. Recently, we received a notice from the ESI stating that our establishment falls under Sec-1(5). Can anyone please explain this to me, as ESI officials are insisting on filing Nil returns? This situation is a bit confusing to me.

With Regards,
Ravindra
Mobile: 09930855311