High Turnover in Sales: Should We Delay PF & ESIC Deductions to Reduce Losses?

I am working in a manufacturing company. Our company's employee turnover is too high in the sales department, as some employees tend to leave within 1 or 2 months. As per our company policy, we deduct ESIC & PF from the first month of employment, so a significant amount is wasted if they leave within a short period.

Policy Change Proposal

Can I change the policy so that we deduct employees' PF & ESIC after three months of employment?

Training Period Consideration

Can I put them through training as part of the job for three months with only gross salary? After continuous service, we will put them on the payroll.

You have stated that as per your company policy, you have been covering all employees from the date of joining. This is fine as per the PF/ESI Act. Employees leaving with short service cannot be the grounds to change the policy. Please inform employees to get their PF account transferred to their new employment. The ESI insurance number allotted in your employment can be continued in new employment.

Even if you are authorized to change this practice, please do not resort to any changes as proposed by you. As an employer, you have to cover under EPF/ESI from the date of joining. Please do not worry about the waste of money; try to find out factual reasons for the huge turnover and put proper systems in place to control the same.