Are ESI and PF Necessary for Interns and Project Students in Short-term Roles?

Hi, we take students for project work/internship for three to six months duration. We are not covered under the Apprentice Act. We pay them a stipend. Some students work on-site (customer sites), while some work in-house. Do we need to cover ESI and PF for them?

Thanks,
Usharani Manne

ESI and EPF Coverage for Apprentices and Trainees

If your unit is covered under ESI, then ESI has to be covered for the apprentices as well, irrespective of the place of work. They need not be covered under EPF as long as they are apprentices. However, if they are trainees, they have to be covered under EPF as well.

Regards,
M. Venkatraghavan

Dear Usharani ji, You said you take students for project work/internship. My questions to you:

i. Is this project work/internship part of their study/syllabus?

ii. Are they taken on the basis of their college recommendation?

iii. What do they do at customer sites, and what do you mean by work in-house?

According to my view, if the project work/internship is not a part of their study and they are not recommended by their college, you are liable to cover them under PF and ESI. You may call them apprentices, trainees, or interns. You may say that you are not paying them a salary but a stipend. The very fact is that they are not apprentices under the Apprenticeship Act or trainees under the Standing Order Act. However, you may exclude them from ESI on the ground of outside work under certain circumstances.

You are requested to go through the below-given link: https://www.citehr.com/showthread.php?t=447790 <link fixed>

According to my knowledge, they may be covered under the WC policy (unnamed policy), not in ESI & PF.

Regards,
Devendra

Thank you for the response.

1. The students are recommended by the college.
2. It is part of their curriculum.
3. On-site means they go to customer sites and practically learn.
4. In-house means they work and learn without moving out of our premises.

Dear Usharani ji, No PF or ESI is applicable to them. There is no relationship between you and them as employee and employer. No labor law is applicable to them.

Regards

I endorse the views of Mr. Koragaonkar, but in my view, much depends upon the nature of activities carried out by your establishment. The employment given to such students by your establishment after the completion of training, etc., is crucial. It would be beneficial for you to take up the matter with the concerned authorities along with all the details.

Regards,
Chandok AK
RPFC (Retd.)
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