Is a 6-Month Contract Employee Eligible for PF and Bonus? Seeking Your Advice

Dear all, I want to know if any candidate is hired only for 6 months, whether the candidate is eligible for PF and bonus. Please help me.

Thanks,
Smriti

He is eligible for PF and ESI from day one of his joining. Additionally, if he has worked for 30 days in a year, he is eligible for a bonus.

Yes, Smriti, he is eligible for PF from day one and eligible for a bonus if he has worked for 30 days or more.

I agree with Mr. Amit; you should not reply if you are not aware of compliance. If no one has raised a question about you, then don't assume that you are right. Mr. Amit is professionally advising you that you are out of line as you lack knowledge of compliance. If you do have knowledge, then you should not provide incorrect answers to very basic questions. Please don't take it otherwise...

Clarification on PF Eligibility

Mr. Akki, when an employee leaves the organization before 6 months of working, they have no right to claim their PF amount. This is true, which I am referring to and will not explain again. So, you better stay calm. And yes, thanks for your kind effort, Mr. Akki...

Regards

PF Claim Eligibility for Short-Term Employees

He/She can claim PF if an employee leaves the organization before 6 months using Form 19, but he/she cannot claim the pension amount using Form 10 C. Please make a note, Mr. Arora.

Regards.

If an employee leaves the organization before completing 6 months, will they be eligible to claim the contribution of the employer as well? Or do they have to stay back with their own contribution?

Regards,
Pramod

Question on PF Withdrawal Processing Time

Why are we considering only 6 months for the processing of PF withdrawal? Can it be less or more than 6 months?

I am new to the forum and the profession as well.

Thanks

My friend was employed with a logistics company in Mumbai, and he has been denied the opportunity to claim the PF contribution by the employer as he left the job before completing 6 months. When he spoke to HR, she mentioned that he had not completed 3 months of employment, so he was not eligible for the employer's contribution to PF.

Eligibility for PF Contribution

Is it the right practice, or should my friend file a complaint against the company with the PF office? Please advise.

Thanks

The PF and ESI apply from day one when an employee starts working and is eligible for a bonus by working a minimum of 30 days. Kindly try to resolve any issues, if any, rather than arguing about the same.

Best Regards,
Nidhin
HR Practitioner.

PF Compliance for Short-Term Employees

We are a small company that recently began contributing to the Provident Fund (PF) for our employees as we exceeded 20 employees. We were clearly informed that we must deposit the employer's contribution into the employees' PF account, even if an employee has worked for just one day, provided they are on the payroll and receive a salary for that day.

We encountered a situation where an employee left after a week. Our PF consultant suggested not showing this employee on our rolls and paying them in cash for the week to avoid paperwork, which is now partially online. However, we felt this was irregular and proceeded with all the PF formalities for just one week of salary.

The issue isn't the small amount required for the account but rather filing the PF returns correctly and on time, which is somewhat tedious and must be done online. It doesn't matter if the employee is not confirmed or eligible for leaves or bonuses as per company rules; PF is mandatory from day one, even for temporary employees. PF includes both employee and employer contributions, and there is no provision for waiving the employer's contribution. Even if we outsource some work at our office, it is our responsibility to ensure that the outsourcing vendor is paying PF for the work carried out at our premises by their employees.

Aside - let's all keep the language polite, professional, and to the point. What I have shared above is based on my own experience, and I could be mistaken.

Regards,

Yes, as shared by Amit, if a person joins as an employee on a permanent basis, they are eligible for PF from day one and eligible for a bonus if they work for more than 30 days in a financial year. Since you have no plans to hire a person on a long-term basis and visibility is only for 6 months, hire a person on a contractual basis for a fixed lump-sum amount per month.

Regards,
Sridhar B G

Provident Fund (PF) Applicability

PF is applicable up to a Basic (+ DA) salary of Rs. 6,500/- per month. If it exceeds this amount, it is up to the employer to decide whether to include the employee under PF or not.

Bonus Eligibility

Bonus is paid to an employee who has successfully completed 30 days in an organization.

Employee State Insurance Corporation (ESIC) Applicability

ESIC is applicable up to a gross monthly salary of Rs. 15,000/-, subject to the ESIC scheme's applicability in that area.

Regards,
R P Singh

Thank you for your kind effort. However, Mr. Amit started pointing at me in such a harsh way, and I only replied in the same manner as I didn't do so intentionally.

Regarding the Concern About the Wrong Reply

I mentioned what I felt, i.e., I have observed in many organizations that when an employee leaves before 6 months, they may not receive their PF amount. This may not happen in all cases.

God bless.

Sorry from my side...

Regards

Mrs. Smriti,

The candidate is eligible for PF dues as per the PF Commissioner of India, Amendment in 1995, and also for the company bonus (as per company standing orders and rules).

Regards,
Wilson

I request you to please understand that we shouldn't quarrel. Any employee who is hired for only six months is not eligible for PF; hence, their PF deduction will take place accordingly, e.g., basic <6500. However, if they leave the company, they have to fill out Form 13 to transfer their PF.

Bonus:

Yes, the employee is eligible to receive a bonus, but it should be according to the criteria of the Bonus Act.

If we hire any person as a trainee or Management Trainee, they are covered under ESI, not PF, whether they are hired for 6 months or one year. If we hire any person as a probationary or permanent employee, they are covered under PF and ESI from the first day of joining.

Hi, we have a manufacturing unit with ESI and PF. Kindly inform me how to calculate the bonus.

Regards,
Girish
[Phone Number Removed For Privacy Reasons]

Understanding Employee Coverage and PF Eligibility

Please let us understand the concept very clearly:

• The coverage of an "Employee."

• There is no distinction between permanent, casual, part-time, temporary, working at home, or piece-rate workers (Baji Beedi Factory Vs. The Appellate Authority, 1998 LLR (Karnataka HC), etc.).

• No minimum working days are prescribed when a fresher joins an establishment; they are to be covered from day one on duty.

• Except on the first day of joining, his/her wages/salary is greater than Rs. 6,500.

• Claiming of PF comes second; this question arises later. There is no question about the claim when a person joins on the first day.

• Necessary declarations should be filed by the employer unless the "excluded employee" is involved (any failure is a punishable offense).

- (Exemption only applies if the individual is employed for a brief period in place of a regular employee who is on leave - Allahabad HC 1992-LLR 906).

Case Law:

Notification No. GSR. 689 dated 19.10.1990.

Orders of the Madhya Pradesh High Court validating the above Notification, which was upheld by the Supreme Court's order dated 17.4.1995 in J.P. Tobacco Products Vs. Union of India (1996 (1) LLJ 822 (SC)).

Hi, is a trainee or stipend worker eligible for ESIC and PF contributions? Please support with your views to clear the doubt.

On the 1st day, he is eligible for PF, ESIC, and bonus if an employee's wages/salary come under these statutory compliances.

Reference: https://www.citehr.com/412034-regard...#ixzz1x5doEBo6

The P.F. Act and Bonus Act are meant for the benefit of employees. Please follow the provisions as per the Acts.

Having worked for 6 months, he is entitled to P.F. (from day one of entry) as well as Bonus (having worked more than 30 days in the year).

Regards,
D. GURUMURTHY LL. HR & IR Consultant HYDERABAD

I want to know if PF is applicable during the probation period as well.

Probation Period and PF Applicability

The probation period is essentially an observation period for individuals newly joining an organization, typically lasting 3, 6, or 12 months before confirmation in the position. During this period, the individual is entitled to a full salary and PF if the salary is less than 6500 Rs. After the completion of the probation period, the individual's service will be counted from the date of joining only.

Regards

Hi Smriti,

We would like to update you that company policy varies; it depends on the process that you follow. However, as far as PF and Bonus are concerned, we believe an individual should complete at least 1 year so that their performance can be measured. Based on their behavior, they should also be eligible for a bonus. Bonus and rewards will always help motivate employees, resulting in building trust between employees and the organization.

We don't see any reason to hold on to PF and Bonus if the employee completes at least a year.

Regards,
Imran Mansoori
Sr. Executive
HR Services
Ugam Solutions Pvt Ltd.

As per the PF and Bonus Act, the employee shall be covered with effect from their date of joining (DOJ). Bonus is payable only when the employee is in continuous service for 30 days, including public holidays and Sundays/weekly offs.

Regards,
Rizwan Sothe

I want to know if an employee works for only three months and then leaves the job, can they claim for PF?

Regards,
Gufrankhan Pathan

Dear Amit and Hitesh, this is not the "Akhada." Maintain the dignity of 'CITEHR.' We are professionals.

Eligibility for PF, ESIC, and Bonus

Dear Smriti, an employee is eligible for PF, ESIC (₹15,000 p/m or less), and bonus from the first day in the organization. However, if he/she leaves the organization before completing 6 months, he/she will not be eligible to withdraw his/her PF. If he/she completes a minimum of 6 months in any organization, then he/she can withdraw his/her PF. Moreover, after 6 months, if he/she joins another organization and continues with the old PF account, the PF will remain.

For a bonus, a minimum of 30 working days in a year is required for eligibility.

Thanks,
Rohit

Eligibility for PF and ESI in Pvt. Ltd. Companies

As per norms, if the organization is a Pvt. Ltd. company, then any employee is eligible for PF and ESI right from the date of joining. Anyone against this is recommended to go through the norms and then post their thoughts here.

Regards,
Prashanth