Navigating New Labor Laws: How Do Apprenticeship Stipends Affect PF/ESI Contributions?

Apprenticeship/Trainee Scheme Under New Labor Laws

Dear Folks, there is a scheme for Apprenticeship/Trainee as per the new labor laws. If we provide a stipend, we do not need to make PF/ESI contributions, and the entire amount can be given to the employee. Please share your inputs on the program and its process:

a) In the stipend part, are we required to pay PF/ESI?

b) How to enroll in the scheme and create more employability opportunities through Apprenticeship/Trainee?

c) Is there any exemption for statutory non-payment, or will the government bear the cost?

Dear Friend,

1. There is no liability for paying PF or ESIC to an Apprentice.
2. Please follow the link for registration Apprenticeship Home

Please let me know if you need any further assistance.

Hi Shivam,

Could you please confirm if the program is conducted with an objective of later absorbing the apprentices as employees in your company? This is because if the training becomes job-oriented, then ESI deductions may be required, though PF deductions would not be necessary. PF deductions are carried out only for employees in a formal status.

Regards,
Nelson