Is PF Applicable to all employees and trainees from day1 of their joining ?

Hi Seniors,

Is it mandatory to extend the benefits of PF and ESI to all employees right from day 1 of their joining the organization? Our management wants to know whether they can receive the benefits of PF & ESI after their probation period. Is there a rule that requires them to be enrolled in these benefits? If so, please provide further information.

Thanks,
Dev

If your organization is covered under the definition of establishment under the ESI & PF Act, then all the employees are covered under ESI & PF from day one of their joining.

I checked the PF Act, but it's not stated that we have to cover them from the very first day of their joining. Can you please forward any notification regarding this issue so that I can show the same to our management.

In the EPF Act, is it stated that employees need to be covered under EPF & ESI only after probation? You have to cover them from the day wages are payable to them.

Thank you, Mr. Varghese. Our management has requested me to provide a notification that mandates covering employees under both ESI and PF from their day of joining the organization. The Management argues that it is a waste of money since the employee will be under probation for up to six months, and whether they will continue in service beyond probation is uncertain.

Therefore, they have asked me to present a notification that clearly states the requirement to cover employees under probation immediately upon joining the organization. If you have access to such a notification, could you kindly forward it to me?

Thanks,
Dev

You read para 29 of EPF Scheme. It says the contribution shall be 10/12% of wages. If you don't pay wages during probation, you need not pay the contribution. You can terminate an employee, or he can resign after confirmation. Even then, PF contribution can be a waste of money!

Dear Venkat,

Please peruse the attachment - EPF Scheme, 1952 - Chapter IV, Clause 26(2).

If your establishment is already covered under EPF & ESI, all employees need to be covered from the date of joining by virtue of the applicability of the EPF/ESI Act to the establishment. Probationers earning a salary are also employees to be covered under EPF/ESI.

Thank you.

Thank you very much, Mr. Srinath, for your time in replying to my query!