Is a 2-Year-Old Firm with 19 Employees Required to Follow EPF and ESIC Rules?

1) Please clarify whether an organization, a recently established firm that is 2 years old with 19 employees, is covered under the EPF Act's purview.

2) Kindly also clarify if we hire temporary manpower as trainees for one or two months, do we need to pay ESIC and PF.

Can you please update the nature of the industry.

1) As per ESI & PF, if any manufacturing industry's total employee strength reaches 10 and above, then it is mandatory to enroll all the organization for ESI & EPF.

2) Yes. All employees, including short-term employees, probationary employees, or trainees, should be covered by ESI/EPF.

In both the enactments referred to by you, the term used is "persons" and not "employees." Therefore, for example, in respect of coverage under the ESI Act, 1948, there must be employment of a minimum number of persons, and all such persons may not be "employees" as defined under the said Act.

Only the persons engaged under the Apprenticeship Act, 1961, are not covered under the ESI Act, 1948, provided their duration of employment does not exceed what is laid down under the Apprenticeship Act, 1961.

Please be careful when you give any information on the forum. The PF Act applies only when the employer has 20 employees or more. It is not 10 employees. Further, ESIC regulations vary from state to state. In Maharashtra, it's 20 employees having a salary of less than 15000 per month.

Mr. Jeevaratnam,

The minimum number of employed persons for EPF is not 10 but 20. The amendment proposed in the EPF Act is for 10 persons.

Thank you.