I am working as an HR Executive in an electronic manufacturing company. My management wants to know if there is any option to provide a stipend to a fresher without any statutory deductions or additions. Please clarify.
Thanks & Regards,
R.D. Babu
From India, Madras
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Thanks & Regards,
R.D. Babu
From India, Madras
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You can show the employee and pay them a stipend as a trainee, or you can have them work as an apprentice and pay their salary through the bank itself, but it is better not to show the apprentice in the Muster's.
Regards,
Ramkishore
From India, Bangalore
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53Regards,
Ramkishore
From India, Bangalore
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No ESI for Apprentice you need to pay ESI for Trainee ESI is must but no pf is applicable for both..... Regards, Ramkishore
From India, Bangalore
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From India, Bangalore
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There are rules applicable to apprentices You can not just select and appoint someone as an apprentice Please make sure that you are following the procedure else you will have a bigger problem
From India, Mumbai
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From India, Mumbai
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Hi Ramdass, If they are registered under Apprentices ACt, then the stipend is applicable without any statutory deductions. but if they are copmany trainee, then it is compuslory. Regards,
From India, Pune
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From India, Pune
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Dear Ramkishore, As you see the definition of Employee or Worker for PF, ESI Act, and Payment of Bonus Act, you can clearly understand it yourself. You may also check the definition of Wages for both these acts.
The word "stipend" is exclusively for the compensation of training for those apprentices who are governed by separate legislation like the Apprenticeship Act.
Status of Company's Standing Orders
What is the status of your company's Standing Orders? Have you shown a class of worker as an Apprentice in your standing orders? Please verify this as well.
In the end, in my opinion, there is no way to exempt your trainee from statutory deductions. However, you can seek legal advice to see if there is any scope to get an exemption from PF for the apprentice if you have classified them in your certified standing order. I hope this may help the situation.
Regards,
Mangesh Wakodkar
Aurangabad
From India, Pune
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The word "stipend" is exclusively for the compensation of training for those apprentices who are governed by separate legislation like the Apprenticeship Act.
Status of Company's Standing Orders
What is the status of your company's Standing Orders? Have you shown a class of worker as an Apprentice in your standing orders? Please verify this as well.
In the end, in my opinion, there is no way to exempt your trainee from statutory deductions. However, you can seek legal advice to see if there is any scope to get an exemption from PF for the apprentice if you have classified them in your certified standing order. I hope this may help the situation.
Regards,
Mangesh Wakodkar
Aurangabad
From India, Pune
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[QUOTE=saswatabanerjee;1857054]
Yes, your synopsis is what I was talking about.
Apprentice Employment Limits
One additional point - there is a limit on the number of apprentices that can be employed in a unit. That number is decided by the apprentice advisor. Also, you need to register each of the apprentices (as you have stated). Furthermore, the period is also decided by the apprentice advisor (generally 1 year). If the rules are followed, then it's okay. In fact, I have seen some companies in rural Maharashtra save a good amount of money by using apprentices (as they are paid far less), even for roles like data entry staff.
Cost-Cutting with Apprentices
Yeah, the apprentice is being used for cost-cutting in many companies as they can work for the same stipend for 1 year, and there will be no statutory deductions if the number is higher. All these statutory-related aspects should be maintained. Simultaneously, the apprentice may write the exam at the Apprentice Board and strive for a permanent position in the company.
Regards,
Ramkishore
From India, Bangalore
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Yes, your synopsis is what I was talking about.
Apprentice Employment Limits
One additional point - there is a limit on the number of apprentices that can be employed in a unit. That number is decided by the apprentice advisor. Also, you need to register each of the apprentices (as you have stated). Furthermore, the period is also decided by the apprentice advisor (generally 1 year). If the rules are followed, then it's okay. In fact, I have seen some companies in rural Maharashtra save a good amount of money by using apprentices (as they are paid far less), even for roles like data entry staff.
Cost-Cutting with Apprentices
Yeah, the apprentice is being used for cost-cutting in many companies as they can work for the same stipend for 1 year, and there will be no statutory deductions if the number is higher. All these statutory-related aspects should be maintained. Simultaneously, the apprentice may write the exam at the Apprentice Board and strive for a permanent position in the company.
Regards,
Ramkishore
From India, Bangalore
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Indeed no statutory deductions for stipend, not even specific mode of payment, and deductions are far from that........
From India, Bangalore
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From India, Bangalore
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Management always looks at the findings to avoid spending on welfare measures for employees. Anyway, coming to your point—if your company is registered under the Apprentice Act, then you can pay a stipend with the deduction of ESI, which is mandatory, and EPF contributions do not fall under the liability of the employer. Morally, it is good to provide EPF to apprentices for social security. Please go through the Apprentice Rules of your state.
Thanks,
Naresh Gadde
Hyderabad
From India, Hyderabad
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Thanks,
Naresh Gadde
Hyderabad
From India, Hyderabad
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Dear Madhu, Its depends on company norms. if your company is registered with PF/ESI.You can make the deductions otherwise no. Leela-HR Vijayawada.
From India, Hyderabad
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From India, Hyderabad
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It depends on company norms. You can show the apprentice candidates as off-roll employees, and you can dispatch their salary by hand. There is no need to deduct any PF or other statutory deductions. Alternatively, you can show them as on-rolls and deduct PF also (if they want).
Regards,
Ratna.V HR
From India, Mumbai
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Regards,
Ratna.V HR
From India, Mumbai
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