Good morning, I'm working in the hotel industry as an HR Executive. We have some Industrial Trainees (similar to apprentices) for a period of 6 months, and we are paying them a stipend. However, during the last ESI inspection, the ESI inspector suggested that Industrial Trainees should also receive ESI benefits. We are not paying them a salary but providing a stipend. What is the procedure for the trainees' contribution?
From India, Bangalore
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From India, Bangalore
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Only apprentices who are engaged as per the Apprentice Act, 1961 are exempted from coverage. The trainees should have been selected for training following the guidelines in this regard only. The stipend at the rates prescribed by the Central Government should be paid by the employer. Normally, the period of training will be for one year, and there will be a contract of apprenticeship training entered into between the employer and the trainee in the presence of the guardian of the trainee. Such trainees are to report to the Related Instruction center once a week for theory classes. Therefore, you will have them for 'work' only for 5 days. The day on which they should report at the RI Center should be marked as present for the payment of stipend. Besides, they are not supposed to work overtime without permission from the Apprentice Adviser.
The test of whether your trainees are apprentices or not is the agreement executed in this regard and the relevant orders of the District Apprentice Adviser/ITI/RI Center. Such trainees are treated as undergoing their practical classes which is mandatory for them to appear for the National Trade Apprentice Test.
All other trainees, even if you call them apprentices, will be covered by ESI. You are expected to deduct and contribute ESI contributions at the same rate as is applicable to other employees even if you refer to the remuneration being paid to these trainees as "stipend."
Regards,
Madhu.T.K
From India, Kannur
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4526The test of whether your trainees are apprentices or not is the agreement executed in this regard and the relevant orders of the District Apprentice Adviser/ITI/RI Center. Such trainees are treated as undergoing their practical classes which is mandatory for them to appear for the National Trade Apprentice Test.
All other trainees, even if you call them apprentices, will be covered by ESI. You are expected to deduct and contribute ESI contributions at the same rate as is applicable to other employees even if you refer to the remuneration being paid to these trainees as "stipend."
Regards,
Madhu.T.K
From India, Kannur
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BENEFITS UNDER ESI.ppt
GOI Proposal for reduction in ESI Contributions.p df
ESI BENEFITS 2.doc