Understanding Apprentice Stipends: What Are the Legal Implications of Paying More?

Dear Experts,

Please shed some light on the following doubts:

a) How much stipend needs to be paid to Apprentices?

b) Is it mandatory to deduct PF, ESIC, Professional Tax on Apprentices' Stipend?

c) Can we pay stipend over and above the designated limit mentioned by the Apprentices council if we take them through Management Colleges for a "Management Training Program"?

d) What would be the statutory liability if we pay stipend over and above the designated limit?

Thank you in anticipation.

Stipend for Apprentices

Apprentices are to be paid a stipend as decided by the Central Government in this regard from time to time. Please refer to the notification pertaining to your apprentice and decide.

Apprentices are not employees, and as such, their stipend is to be paid without deductions for PF, ESI, and other payments.

Management Trainees and Stipend

There is no apprentice under the trade "Management Trainee." If you are hiring management trainees from management colleges, you can fix the stipend as you see fit, and there is no limit for that. A trainee so hired will be an employee in all respects, and whatever you pay as a stipend will come under the definition of salary. As such, you should deduct ESI, PF, etc., subject to their applicability to these trainees concerning their remuneration.

Thanks a lot, Madhu.

Also, please clarify:

a) Can we pay stipend over and above the designated limit mentioned by the Apprentices council? What would be the statutory liability if we pay stipend over and above the designated limit?

Thanking you in anticipation.