Are PF and ESI Applicable During Probation? Seeking Clarity on Employee Rights and Obligations

Hi all,

I have one query regarding "The Employee's Provident Fund Act" and "The Employees State Insurance Act." I want to know the applicability of PF and ESI to employees who are working under a probation period. For example, I am working in a BPO/ITES company for the last 2 months. I am still in the probation period. Is the company/employer liable to provide Provident Fund and ESI, or can the company start paying me PF and ESI only after my permanent appointment?

If they sack me after paying one month's PF and ESI, what steps should I follow to get back my PF deposits? What steps should the employer take to close my PF account? Are there any legal obligations to be followed?

Please help me out.

Thanks and regards,
Debu

As per the Act, all probationers are eligible for PF/ESI deduction, compulsorily. You will be eligible for PF if your basic salary is below Rs. 6500 and will also be eligible if your gross salary is below Rs. 10000. ESI deductions cannot be refunded, whereas PF deductions with the equal company contributions will be refunded. You will have to submit the application through your company after three months of your leaving. The same will be processed and reimbursed to you within one month from the date of receipt of your application at the respective PF office.

Regards,
gandhi24x7

Dear friends,

I have joined a new company as a fresher. The situation is that this company does not have an HR department, and I am the first person to take on this role. My initial assignment is to establish the PF & Gratuity policies and create a new salary structure. I need to provide written details to everyone whose basic salary is affected by these changes.

For HRA, you should submit the rental receipts. For medical benefits, you should submit the bills. Now, for LIC and other benefits, I am unsure what information to provide. Can anyone guide me on this?

Rekha

Dear Gandhi,

Thank you very much for your response. Please guide me on "what a company needs to do to close PF & ESI accounts of an employee when he resigns."

Regards,
Debu

Hi,

As you mentioned, for E.P.F, the limit for basic is Rs. 6,500/-. My query is how to be exempt from E.P.F if an employee has a basic salary exceeding Rs. 6,500/-.

Regards,
Param

PF & ESI are mandatory for the employer who recruits more than 20 employees for PF and 10 for ESI. The calculation for PF is 12% on the basic salary, which will be deducted from the employee's salary. From the employer's side, 8.33% goes to the pension scheme and 3.67% to the PF.

The calculation for ESI is based on gross earnings, specifically 10,000/- and below. The deduction from the employer's side is 4.75% and 1.75% from the employee's side.

The PF amount must be remitted to the SBI bank before the 15th of every month, and the returns should be forwarded to the EPF office on or before the 25th of the month. The ESI amount has to be remitted on or before the 21st of every month in the prescribed challan to SBI.

You have said that PF is to be contributed at 12%, i.e., employee and employer contributions are equal, which was also my understanding until now. But I have received this new information about the employer's contributions:

- Pension Fund: 8.33%
- EPF: 3.67%
- EDLI: 0.5%
- EPF Admin Chg: 1.1%
- EDLI Admin Chg: 0.01%

How do you pass the accounting entry for this? I am confused. Can you please let me know on [Login to view]? I really find it difficult to find feedback to my queries since I am new to the forum.

Thanks,
Pari

Hi,

I am a management student studying MHRM. I have to submit my research report on 20th Sep 2008. My project subject is HRD Practices on Motivation. Please help me with information about motivational factors for employees. How are HR practices related to this?