Are PF and ESI Deductions Required for Trainees? Seeking Legal Insights and Experiences

Dear All,

In my previous company, we were deducting PF and ESI for trainees and probationary employees. In the present company, we are not deducting PF and ESI for trainees and probationary employees. Is there any law that states there is no need to deduct PF and ESI for trainees?

Kindly forward your remarks.

V. Sandeep

Persons covered under the Apprentice Act are now eligible to avail the benefits of ESIC as per the new guidelines from the ESIC department.

Regards,
Mukesh Mehta

Dear,

In case the apprentices are taken under the Apprentices Act or Standing Orders, they are exempted.

With Regards,

V. Sounder Rajan
Advocates & Notaries & Legal Consultants
E-mail: rajanassociates@eth.net
-9025792684.

More at https://www.citehr.com/285737-legal-...#ixzz1ALZNCTN5

Applicability of PF and ESI to Trainees and Probationary Employees

PF and ESI are very much applicable to trainees and probationary employees. It depends on the company whether they have a probation period or not, but that does not mean that a company can exempt itself from PF and ESI.

Regards,
Mukesh Mehta

Dear V. Sandeep,

I fully agree with what V. Sounder Rajan has mentioned. If the apprentices are registered under the Apprentices Act or the Employees' (Standing) Orders Act, they are exempted from PF. Sometimes, companies intentionally keep the stipend of trainees more than Rs. 6500/- per month (for those who are not registered under the Apprentices Act) to avoid PF responsibility. Simultaneously, they register all the trainees under the Apprentice Act to receive financial aid from the government for each trainee.

Regards,
Jawed Alam

Dear Friend,

Whenever you are in doubt about whether the xyz category of employees is covered by the provisions of any law, please always first read the definition of EMPLOYEE/WORKER (under that particular legislation). These definitions clearly indicate who is covered by the provisions. In this case, PF is not applicable to apprentices, whether or not the stipend is more than Rs. 6500. However, as rightly advised by Mr. Mukesh Mehta, ESIC is applicable.

Regards.

Dear Sunil Sardar,

As per Section 2(f), "employee" means any person who is employed for wages in any kind of work, manual or otherwise, in or in connection with the work of an establishment and who gets his wages directly or indirectly from the employer. This definition includes any person:

(i) employed by or through a contractor in or in connection with the work of the establishment;

(ii) engaged as an apprentice, not being an apprentice engaged under the Apprentices Act, 1961 (52 of 1961) or under the standing orders of the establishment.

So, in my opinion (with my limited mental faculty), if an apprentice who is not engaged/registered under the Apprentice Act, 1961, shall not be treated as an apprentice as far as the meaning of "employee" under the PF Act is concerned.

Therefore, if an apprentice is not engaged under the Apprentice Act, they are considered as any other employee, and the company is obligated to deduct PF as per the PF Act. Furthermore, if the company starts deducting PF for those apprentices who are not covered under the Apprentice Act, they will be treated as "workmen" as per the ID Act. The company may face legal issues at the end of the apprentice's training period when terminating the contract, even if the performance is unsatisfactory.

This is why I mentioned the Rs. 6500/- wages ceiling to avoid PF responsibility in the case of apprentices who are not covered under the Apprentice Act.

Jawed Alam

Probationers are covered by EPF and ESI subject to their salary conditions. Trainees are also covered under both these Acts. However, apprentices engaged under the Apprentice Act, 1961, after registering with the Related Instruction Centre (RI Centre) of the Government are exempted from the operation of both EPF and ESI. Similarly, trainees engaged following specific provisions in the Certified Standing Orders of the company (if available) are also exempted from EPF, but with the new amendment in the ESI Act, no such exemption is available under the ESI.

Regards,
Madhu.T.K

PF and ESI Applicability to Apprentices or Trainees

Dear all, please help. Are PF and ESI applicable to apprentices or trainees? Has there been any notice issued by the PF and ESI department or any judgments? Please send a photocopy.

Thanks.