Is There a Rule on Employee-to-Trainee Ratios? Seeking Advice on PF Compliance Issues

Is there any mandate that the ratio of employees to trainees is 60:40? Please advise. For example, in our company, we have 20 permanent employees and 50 trainees. The trainees are appointed under the standing order. The PF commissioner is saying that the trainees are not proportionate to the employees, and we have to pay PF for all trainees. What should we do? Is there any mandate that the trainees should be proportionate to employees?

Could you please specify the ratio you would like to use to describe whether it is Employees: Trainees or Trainees: Employees? Please clarify.

Warm Regards,
Hrushikesh

I would like to know whether PF is to be paid to trainees if employees are fewer and trainees are more. Is there any hard and fast rule about the proportion of trainees? The company has a certified standing order.

There is no harm in paying PF to trainees irrespective of the ratio. If your company decides to pay PF to trainees, this will help your trainees to get motivated and perform better.

With profound regards,

That was not my query. We are not paying PF for trainees, but the commissioner is saying that trainees are more than permanent employees; hence, we must pay PF.

Follow what the PF COMMISSIONER says. Labor law is always in favor of employees and supports organizations to an extent as well. Do not try to avoid LABOR LAW and try to save. Later, it's your company that has to face consequences.

With profound regards

Dear Mr. Sanjay,

Applicability of PF to Trainees

PF is applicable to trainees (except those engaged under the Apprentices Act, 1961). Please refer to the definition of "employee" under the Employees' PF and Misc. Provisions Act, 1952, which I am quoting below:

"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 receives his wages directly or indirectly from the employer, and 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."

Proportion of Trainees to Permanent Employees

I have not come across any legal mandate that specifies the proportion of trainees compared to permanent employees. Employers typically plan the recruitment of trainees to train them on-the-job, with the intention of absorbing them into regular employment upon successful completion of their training, either against normal vacancies or replacement vacancies due to employee turnover. The number of trainees is usually determined in the annual HR Budget based on the scope of work, projected manpower requirements, and the annual turnover rate of employees.

Regardless of the number of trainees and their ratio to regular employees, the legal provision is clear that the EPF and Misc. Provisions Act, 1952, applies to them from the first day of their employment.

I hope this clarifies any doubts you may have regarding the applicability of PF to trainees.

Please also review Sections 14, 14A, 14AA, 14AB, 14AC of the PF & MP Act, 1952, to gain a comprehensive understanding of the penal provisions in case of default or offenses by the employer.

Sincerely,

Vijayanta Kumar Sinha