Hiring Seniors Temporarily: Do ESIC and PF Rules Apply to Those Over 60?

We have terminated a service contract of a firm and are planning to employ 4 people from this firm on a temporary basis. Two out of the 4 are over 60 years of age. Is the rule of ESIC and PF applicable to them as well?

Dear Reenuohlan, If the age of the candidates is over 60 years, which is considered the maximum age for employment, then you cannot hire them for your role. The maximum you can do is offer them a consultant position, where appropriate taxes are to be paid, and there is no need to pay PF and ESIC for them.

ESI Coverage

As regards ESI coverage, there is no age limit, and the coverage must continue until the wage limit is not exceeded.

PF Coverage

As for PF coverage, the contribution under the Employees Pension Scheme is only up to the age of 58 years. After that, the entire contribution goes to PF and is eligible for a pension. Since these employees have already crossed 58 years of age, they can get their final withdrawal and then be considered "excluded employees" under the PF Act. Therefore, no coverage is needed under the PF Act thereafter.

When you are considering hiring employees who have already been terminated from another firm, why hire individuals above the age of 60? If you require their expertise and cannot temporarily do without their services, it may be beneficial to bring them on board as consultants. This can be done by offering a consolidated pay or retainer pay to compensate for their services.