Navigating Temporary Employee Rules: Salary, PF Deductions, and Legal Obligations

Guidance on Temporary Employees

a) Is a temporary employee eligible for a monthly salary? If I am paying a salary of less than 15,000 per month, do I need to deduct PF? Please guide.

b) Under what category do we normally pay temporary employees' monthly salaries?

c) As per the law, if a temporary employee shows continuation of work for more than 6 months, are we legally bound to make them permanent?

d) If I want to continue employing them as a temporary employee, what is the time frame or rest period I need to provide? Please guide.

Please add any points if I have missed something and also correct my understanding wherever wrong.

Before answering your series of queries, I think it is better for us to contemplate together on the concept of temporary employment. Temporary employment is normally a situation requiring the employment of additional or extra workforce for a limited period of time depending on the needs of the employer, such as replacement for a leave vacancy, incidental or ancillary activities involving a few hours of work, special works lasting for a specific duration, and the like. Therefore, temporary employment may be in the nature of casual labor, contract labor, part-time employees, fixed-term contract employees, etc., resulting in a less formal employment relationship.

After the phenomenal surge of LPG (Liberalization, Privatization, Globalization), there is a paradigm shift in staffing where temporary employment of people is preferred by employers for the sake of easy hire and fire options. The current position is that an employer can employ a person temporarily in a permanent job under one pretext or another, like fixed-term contract employment, outsourcing, etc., despite the preventive legal restrictions imposed by labor laws such as the Industrial Employment (Standing Orders) Act, 1946, the Industrial Disputes Act, 1947, and the Contract Labor (Regulation and Abolition) Act, 1970.

Responses to Your Questions

(a) I don't think that the EPF Act distinguishes the pattern of employment as temporary or permanent.

(b) I am not able to understand your question as I was in government service only throughout my career.

(c) Item no. 10 of Part I of Schedule V of the ID Act, 1947, says that keeping employees as temporaries on rolls for years together to deprive them of the status and benefits of permanent employees is an unfair labor practice as defined under section 2(ra) on the part of the employer. So, it depends on the provision for confirmation in your Standing Orders as well as the type of temporary employment.

(d) The answer to the previous query applies to this one as well.

I hope this helps clarify the concepts surrounding temporary employment. Let me know if you need further assistance.

Best regards,
[Your Name]

If you fix the wage period for a temporary employee for a month, then you can pay him a salary on a monthly basis. A temporary employee drawing wages of Rs. 15,000/- per month or less, or a member of the PF scheme previously, is entitled to PF benefits unless he is an excluded employee (someone who withdrew his entire PF amount on superannuation). The rest of your queries were adequately answered by Mr. Umakanthan.

B. Saikumar
Navi Mumbai

Dear Hemant,

Please refer to the EPFO Act of 1952 for PF deductions or follow the state act in which your company exists. You have mentioned that after six months, I should be taken on as an employee. It would be better if you could start me as a trainee and then confirm me as an employee. Why are you opting for a temporary arrangement?

Thank you.