Can We Hire Trainee Engineers Below Minimum Wage and How Many Can We Employ?

Hi All, We are in the IT industry and are looking to hire a few apprentice/trainee engineers for our various projects. Could you please clarify the following:

1. Can we hire trainee/apprentice engineers on a stipend that is less than minimum wage (perhaps $2500.00 or $3000.00 per month)?
2. If so, is there a limit on the percentage of total employees in terms of the number of trainees/apprentices we can hire?
3. The purpose of this hiring is to provide on-the-job training and subsequently absorb them at minimum wages based on their performance.

Thank you.

Engaging Apprentices Under the Apprentice Act, 1961

You can engage apprentices on the payment of a stipend (fixed by the Central Government) provided the trade/work in which you are engaging them is approved by the rules framed under the Apprentice Act, 1961. For this, you have to submit your request, or rather your willingness to engage apprentices, to the Apprentice Adviser of the district. Based on your willingness, the Apprentice Adviser will visit your firm and assess the possibilities of engaging apprentices in different trades and the ratio of apprentices to regular employees in which you have to engage the apprentices.

After that, you can ask for a panel of ITI-trained persons from the RI Centre (Related Instruction Centre) and collect the data for conducting an interview and subsequent posting. The period of apprentice training will also be as per Apprentice Rules, and the same will be made available by the Apprentice Adviser. The Central Government has fixed the minimum stipend payable in each case, and depending upon the trade and the length of theory classes attended by them at ITI/Polytechnic/Engineering college, the stipend will vary. An apprentice who has already completed a course of three years' duration is to be paid an appropriate stipend for the fourth year, or a candidate who has completed a program of two years' duration in ITI is to be paid a stipend for the third year, and so on.

Once you are listed in the RI Centre, it becomes mandatory for you to engage apprentices regularly. Therefore, before you go ahead with it, please collect the relevant information, like the amount of stipend, duration of training, etc., which are also available on their website. Apprentices are students undergoing their practical training as part of their curriculum, and any action taken against them shall be after informing the Apprentice Adviser only. They are not supposed to be engaged during the night, and no overtime engagement is permitted. If they are absent without informing, action shall be taken only in the presence or knowledge of the Apprentice Adviser.

Moreover, it is not mandatory that after the training period, the candidate should join our company on the salary offered by us. Of course, it is not mandatory that we should offer employment to them. But more importantly, they can simply say goodbye to us after the completion of the training tenure. Therefore, it should only be viewed as a social commitment and should not be viewed as a scheme to hire people without minimum wages and other statutory coverage, like ESI and PF.

Regards,
Madhu.T.K

It's a very well and elaborate explanation. But, Mr. Madhu, I had a doubt... the persons who are engaged as a part of the curriculum in the IT Sector (e.g., B.Tech students) could be considered as apprentices if they are just sponsored by some Govt. technical institute. Waiting for your reply, please.

Exclusion of Interns and Project Students from Contributions

Internship or students undergoing project study as part of the curriculum can be excluded, although there is nothing in the Act that specifies such exclusion. In order to prove that these individuals are engaged as part of their curriculum, you should obtain a letter from the Principal or HOD of their college/university. Also, you should establish that no stipend is paid to them. If no remuneration is paid, naturally, the question of payment of contribution does not arise. Such engagement is very common not only in the IT field but also in the hotel industry, where 6-month industrial exposure training is already included in the Hotel Management courses.

Regards,
Madhu.T.K

I think I have made it very clear right from the first post that only apprentices engaged under the Apprentice Act, 1961, are exempted from the operation of labor laws such as ESI, PF, Minimum Wages, Payment of Bonus Act, or Gratuity Act.

In respect of interns and project trainees, though the patterns of their engagement are as part of the curriculum, if we have paid any stipend or any kind of remuneration, it will be construed that they have been engaged for the benefits of the business (otherwise, we will not pay any consideration/remuneration), and the payment so made will attract ESI/PF.

Regards,
Madhu.T.K