I’m working in Animation company, college students come to us for training for 3 to 4 months. We pay them 3000 as stipend, will they be included in ESI.
From India, New Delhi
Acknowledge(0)
Amend(0)
5From India, New Delhi
Acknowledge(0)Amend(0)
There are different views regarding such types of trainees. The ESI Corporation will say that only apprentices who are engaged under the Apprentice Act, 1961 are excluded. However, interns, being trainees not on the rolls of the establishments but conducting their project studies as part of the curriculum, may also be excluded. To support this, you will have to produce letters from the college/university stating that they are students undergoing an internship for three/four months, which is mandatory for the award of a degree to them.
Regards,
Madhu.T.K
From India, Kannur
Acknowledge(0)Amend(0)
Regards,
Madhu.T.K
From India, Kannur
Acknowledge(0)Amend(0)
Apprentice refers to such trainees engaged as per the Apprentice Act. The Apprentice Act has specified some designated trades in which trainees can be engaged by industries and establishments. Such trainees (trade apprentices) will be registered under the Apprentice Adviser/Apprentice Officer at the Related Instruction Centre in the respective district. Depending upon the trade, the period of training may vary from one year to three years. Certain trades are considered a continuation of industrial training obtained by the candidates at the ITIs/Polytechnics/Food Craft Institutes. After completion of practical training at factories/establishments, they have to appear for an All India Trade Examination for the award of National Trade Certificate.
Those who have not undergone any basic training in ITIs can also be engaged as apprentices, but they should be registered under the above-mentioned Apprentice Adviser. The practical training offered at the factory/establishment should be as per the syllabus prescribed by the Government of India in this regard.
The stipend of apprentices will be fixed and revised by the central government from time to time.
There are some trainees who are engaged as per the provisions of the certified Standing Orders of the company. They are also excluded from the EPF. Recently, all such trainees have been made covered by ESI.
All other trainees who are not engaged as per the provisions of the Apprentice Act or as per the Certified Standing Orders of the company are trainees. For the purpose of enforcement and application of Labor Laws, these trainees are treated at par with any other employee of the company. Therefore, when the apprentices are paid a stipend according to the notification by the Government of India or when the trainees under the Standing Orders are paid a stipend according to the provisions as such in the Standing Orders, the other trainees are to be paid wages/salary following the Minimum Wages Act. Similarly, when apprentices and standing order trainees are excluded from EPF, the other trainees are to be covered under the EPF. Certainly, Apprentices are excluded from ESI as well.
Regards,
Madhu.T.K
From India, Kannur
Acknowledge(0)Amend(0)
Those who have not undergone any basic training in ITIs can also be engaged as apprentices, but they should be registered under the above-mentioned Apprentice Adviser. The practical training offered at the factory/establishment should be as per the syllabus prescribed by the Government of India in this regard.
The stipend of apprentices will be fixed and revised by the central government from time to time.
There are some trainees who are engaged as per the provisions of the certified Standing Orders of the company. They are also excluded from the EPF. Recently, all such trainees have been made covered by ESI.
All other trainees who are not engaged as per the provisions of the Apprentice Act or as per the Certified Standing Orders of the company are trainees. For the purpose of enforcement and application of Labor Laws, these trainees are treated at par with any other employee of the company. Therefore, when the apprentices are paid a stipend according to the notification by the Government of India or when the trainees under the Standing Orders are paid a stipend according to the provisions as such in the Standing Orders, the other trainees are to be paid wages/salary following the Minimum Wages Act. Similarly, when apprentices and standing order trainees are excluded from EPF, the other trainees are to be covered under the EPF. Certainly, Apprentices are excluded from ESI as well.
Regards,
Madhu.T.K
From India, Kannur
Acknowledge(0)Amend(0)
Hi Garima,
You will have to deduct ESI if the act is applicable in your organization. If you pay them 3000 or less per month, then both the employer and employee must contribute. ESI is a form of social security for employees. Although the student is not your permanent employee, if any unfortunate event occurs during their training period, without contributions, they will not be eligible for any benefits.
Regards,
Anil Kumar
From India, Lucknow
Acknowledge(0)Amend(0)
You will have to deduct ESI if the act is applicable in your organization. If you pay them 3000 or less per month, then both the employer and employee must contribute. ESI is a form of social security for employees. Although the student is not your permanent employee, if any unfortunate event occurs during their training period, without contributions, they will not be eligible for any benefits.
Regards,
Anil Kumar
From India, Lucknow
Acknowledge(0)Amend(0)
Dear Garima,
You have not indicated whether the college students come to you while they are still studying or they come to you after completing their studies.
If they are coming to you while they are studying and the training being imparted by you is part of their college curriculum, then as suggested by Madhu, you can obtain a bonafide certificate in respect of the students, and you can refrain from the payment of ESI.
On the other hand, if they join you after completing their studies, it is recommended that you pay the ESI contribution in respect of them. In the event you have any restrictions from your management on cash outflow, i.e., not more than Rs.3000/-, then you need to build in the ESI contribution within the amount of Rs.3000/-.
However, if you decide to continue to pay Rs.3000/-, then you need to show the wages drawn as Rs.3210/- and after deducting Rs.209 towards 6.5% ESI contribution the employee will be getting Rs.3000/- on hand. Both the employee and employer contribution of ESI must be remitted to ESI to enable the employee to claim benefits.
In my opinion, the second option will be advisable.
M.V. KANNAN
From India, Madras
Acknowledge(0)Amend(0)
You have not indicated whether the college students come to you while they are still studying or they come to you after completing their studies.
If they are coming to you while they are studying and the training being imparted by you is part of their college curriculum, then as suggested by Madhu, you can obtain a bonafide certificate in respect of the students, and you can refrain from the payment of ESI.
On the other hand, if they join you after completing their studies, it is recommended that you pay the ESI contribution in respect of them. In the event you have any restrictions from your management on cash outflow, i.e., not more than Rs.3000/-, then you need to build in the ESI contribution within the amount of Rs.3000/-.
However, if you decide to continue to pay Rs.3000/-, then you need to show the wages drawn as Rs.3210/- and after deducting Rs.209 towards 6.5% ESI contribution the employee will be getting Rs.3000/- on hand. Both the employee and employer contribution of ESI must be remitted to ESI to enable the employee to claim benefits.
In my opinion, the second option will be advisable.
M.V. KANNAN
From India, Madras
Acknowledge(0)Amend(0)
Dear Garima,
No need for deduction of any ESI for trainee worker and secondly, no overtime worked by him/her. In case any injury is caused to an apprentice by an accident arising out of and in the course of his training as an apprentice, his employer shall be liable to pay compensation, which shall be determined and paid, so far as may be, in accordance with the provisions of the Workmen's Compensation Act, 1923, subject to the modifications specified in the schedule.
Please find the attached points. I hope the information is helpful for you.
From India, Delhi
Acknowledge(0)Amend(0)
No need for deduction of any ESI for trainee worker and secondly, no overtime worked by him/her. In case any injury is caused to an apprentice by an accident arising out of and in the course of his training as an apprentice, his employer shall be liable to pay compensation, which shall be determined and paid, so far as may be, in accordance with the provisions of the Workmen's Compensation Act, 1923, subject to the modifications specified in the schedule.
Please find the attached points. I hope the information is helpful for you.
From India, Delhi
Acknowledge(0)Amend(0)
Dear Garima, I agree with Madhu G. Trainees are covered only under the Apprenticeship Act. Therefore, if you have any trainees who are covered under the Apprenticeship Act, they are not liable to be covered under ESIC. If they are not covered under the Apprenticeship Act, then you have to contribute to ESIC.
From India, Rudarpur
Acknowledge(0)Amend(0)
From India, Rudarpur
Acknowledge(0)Amend(0)
Apprentices/trainees are not covered, okay. But the point is how to ward off the liability on account of the Employees' Compensation Act (ECA)? If any mishap happens to any trainee during training, the principal employer will be responsible for the compensation in whose premises the accident occurred. Paying ESI is just 6.75%, but the compensation will be too burdensome. ESI takes care of the ECA.
So, it is advisable that the ESI may be paid. It is not much of a liability but a great relief. Who knows what happens when? Accidents do not come with an advance call.
From India, Chandigarh
Acknowledge(0)Amend(0)
So, it is advisable that the ESI may be paid. It is not much of a liability but a great relief. Who knows what happens when? Accidents do not come with an advance call.
From India, Chandigarh
Acknowledge(0)Amend(0)
Dear pal, Write the whole purpose of their in plant training along with letters from respective colleges to the ESI authorities and seek exemption from them. Thanks HC. SUBBARAMU Bangalore
From India, Kochi
Acknowledge(0)Amend(0)
From India, Kochi
Acknowledge(0)Amend(0)
As far as the ESI Act is concerned, the exclusive part is only for apprentices engaged under the Apprentice Act. So, for the rest of the individuals engaged for any purpose with any nomenclature, you are supposed to extend the ESI to them. The main point to understand here is that you are taking their services not free of cost but paying something, albeit labeled as a stipend. Another issue arises regarding whether they are students or not or if it's part of their curriculum. This distinction is important because as long as you are taking their services, controlling them, and supervising them, in my opinion, all such individuals, whether interns or trainees, establish a master-servant relationship concerning the work of the organization. This relationship may fulfill all the conditions applicable to other employees.
Is there any court judgment that states that other trainees, such as industrial trainees or internship trainees, other than apprentices, will not fall under ESIC? As of now, I believe there is no such judgment.
Understanding Exempted Employees
Moving on to the next point, many of our HR friends are discussing a topic related to employees who earn Rs. 3000 and below. It is my humble request to understand this issue properly. Individuals who earn Rs. 3000 or less per month are referred to as exempted employees. This means they are exempt from paying their share, i.e., the Employees' Share of (1.75%). Please do not misunderstand that the entire 6.5% should be borne by the employer. As their share is exempted from payment, the employer has to pay only their share, i.e., 4.75%.
With best wishes,
Regards
From India, Hyderabad
Acknowledge(0)Amend(0)
Is there any court judgment that states that other trainees, such as industrial trainees or internship trainees, other than apprentices, will not fall under ESIC? As of now, I believe there is no such judgment.
Understanding Exempted Employees
Moving on to the next point, many of our HR friends are discussing a topic related to employees who earn Rs. 3000 and below. It is my humble request to understand this issue properly. Individuals who earn Rs. 3000 or less per month are referred to as exempted employees. This means they are exempt from paying their share, i.e., the Employees' Share of (1.75%). Please do not misunderstand that the entire 6.5% should be borne by the employer. As their share is exempted from payment, the employer has to pay only their share, i.e., 4.75%.
With best wishes,
Regards
From India, Hyderabad
Acknowledge(0)Amend(0)CiteHR is an AI-augmented HR knowledge and collaboration platform, enabling HR professionals to solve real-world challenges, validate decisions, and stay ahead through collective intelligence and machine-enhanced guidance. Join Our Platform.
ESI Amendment Act 2010-Gazette Notification-01 -06-10.pdf
FORMS under the ESI Act.doc