Dear Seniors,
I am about to join an organization. In my 10 years of working, this is my 4th organization where the same thing is happening - the employer will start PF contribution and deduction after the probation period. I believe many of us would have faced the same problem. I could never understand what the employer's thoughts are behind this policy, as PF should start from the very first day of joining.
I am not trying to clarify this with the prospective employer since it is a big opportunity for me, but I want to understand why this has been practiced in most organizations even after the government rule. Can any HR senior explain this to me from the employer's point of view?
Regards
From India, Mumbai
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15I am about to join an organization. In my 10 years of working, this is my 4th organization where the same thing is happening - the employer will start PF contribution and deduction after the probation period. I believe many of us would have faced the same problem. I could never understand what the employer's thoughts are behind this policy, as PF should start from the very first day of joining.
I am not trying to clarify this with the prospective employer since it is a big opportunity for me, but I want to understand why this has been practiced in most organizations even after the government rule. Can any HR senior explain this to me from the employer's point of view?
Regards
From India, Mumbai
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During the probation period, employment is not considered fully established. Within this period, the employer and employee both have to come to a point to decide whether to continue or not. This means determining if the employee is capable of performing their duties as per the establishment's requirements and if they are satisfied with the management. Upon positive performance and attitude, the probationary or trainee employee is converted to an "employee," and statutory deductions commence.
In the probation period, stipend is mostly paid instead of a salary.
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In the probation period, stipend is mostly paid instead of a salary.
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PF is applicable to Probationers as per the EPF Act. Stipend is payable only to Apprentices or Trainees, and Probationers will be paid a consolidated salary or even with Basic, DA, and allowances like HRA, etc.
N. Nataraajhan, Sakthi Infogy Solutions Pvt Ltd (natraj@sakthimanagement.com)
From India, Bangalore
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N. Nataraajhan, Sakthi Infogy Solutions Pvt Ltd (natraj@sakthimanagement.com)
From India, Bangalore
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Mr. NATRAJ is correct. PROBATION is a period of six months or 12 months to assess if the employee is able to cope with the organization. That is all. It has nothing to do with P F or E S I. Even casual is to be covered.
From India, Chennai
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From India, Chennai
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Every employee of the organization, except apprentices who are covered under the Apprentice Act, and consultants, are exempted from benefits such as ESI and EPF. There is no rule stating that probationary employees are exempt. According to the employment act, he/she is eligible for all benefits from day 1 of joining, regardless of being a probationary or confirmed employee.
The reasons for not deducting and remitting EPF/ESI may be:
1) Due to a lack of awareness/knowledge among HR/management or any responsible individuals.
2) Management/HR may believe that the employee might leave in a couple of months, so there is no need to contribute unnecessarily.
3) Many HR professionals and respective individuals still consider it an additional burden/workload to deduct and remit to the respective department.
4) Some management personnel view it as an additional cost to the organization.
From India, Bangalore
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The reasons for not deducting and remitting EPF/ESI may be:
1) Due to a lack of awareness/knowledge among HR/management or any responsible individuals.
2) Management/HR may believe that the employee might leave in a couple of months, so there is no need to contribute unnecessarily.
3) Many HR professionals and respective individuals still consider it an additional burden/workload to deduct and remit to the respective department.
4) Some management personnel view it as an additional cost to the organization.
From India, Bangalore
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As per EPF Act, only apprentices are exempted from EPF & ESIC deductions. The employer is liable to deduct and pay PF from contractual, probationary, and permanent employees. The act is applicable from day one when an employee joins the organization. The only exemption is for those whose basic pay + DA is more than Rs. 15,000. Starting from January, the ESIC ceiling will be Rs. 21,000, but ESIC is applicable to the gross salary.
For more details, contact me for EPF and ESIC consultation at 9752620200 for social help to spread awareness.
From India, Raipur
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For more details, contact me for EPF and ESIC consultation at 9752620200 for social help to spread awareness.
From India, Raipur
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Except Apprentice all the employees are eligible for EPF even casual employees also.
From India, Hyderabad
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From India, Hyderabad
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U S Sharma,
You are misguided about the PF Act and the applicability of laws to probationers. What you have said is that during the probation period, no statutory deductions, such as PF, ESI, PT, LWF, should start. Please remember that many persons visiting the citehr are trying to learn about labor laws, and you are providing incorrect information to them.
From India, Mumbai
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You are misguided about the PF Act and the applicability of laws to probationers. What you have said is that during the probation period, no statutory deductions, such as PF, ESI, PT, LWF, should start. Please remember that many persons visiting the citehr are trying to learn about labor laws, and you are providing incorrect information to them.
From India, Mumbai
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@shrikant Pra
Read my reply once again. If wages or salary are paid, then the ESI/PF question arises, not on stipend. And yes, check your payslip very carefully. If the word "salary" or "wages" appears in the payment, then obviously it would be covered under ESIC/EPF. Even for a single day paid salary or wages, it is subject to ESIC/EPF contribution.
However, if it's marked as "remuneration" or "stipend" in place of salary, then it does not become applicable.
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Read my reply once again. If wages or salary are paid, then the ESI/PF question arises, not on stipend. And yes, check your payslip very carefully. If the word "salary" or "wages" appears in the payment, then obviously it would be covered under ESIC/EPF. Even for a single day paid salary or wages, it is subject to ESIC/EPF contribution.
However, if it's marked as "remuneration" or "stipend" in place of salary, then it does not become applicable.
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If person joins as salary or wage base employee other than Act Apprentice then he will come under PF act.
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U. S. Sharma
Salary paid to apprentices under the Apprenticeship Act is stipend that does not attract PF. Salary paid to probationers can't be stipend so as not to affect PF deduction on it. Otherwise, every unscrupulous employer would have paid stipend to probationers and would have escaped PF deductions during the probation period; they would have extended the probation period. Just by naming the salary paid to probationers as stipend, one can't escape from the provisions of the PF Act; otherwise, most organizations would have done it.
I treat this post as closed from my side.
From India, Mumbai
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Salary paid to apprentices under the Apprenticeship Act is stipend that does not attract PF. Salary paid to probationers can't be stipend so as not to affect PF deduction on it. Otherwise, every unscrupulous employer would have paid stipend to probationers and would have escaped PF deductions during the probation period; they would have extended the probation period. Just by naming the salary paid to probationers as stipend, one can't escape from the provisions of the PF Act; otherwise, most organizations would have done it.
I treat this post as closed from my side.
From India, Mumbai
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Just visiting somewhere and receiving money in exchange does not classify as an employer-employee relationship. If a probation letter is provided, and the words "SALARY" or "WAGES" are mentioned in the letter, then all relevant acts come into force. There are various loopholes in the act; please try to understand.
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"Just visiting somewhere and getting some money in lieu of that does not classify as an employer-employee relation."
Then what classifies an employer-employee relation? Does an employee visiting "somewhere" and the employer still paying him/her constitute an employer-employee relation?
"Getting some money (from the employer) in lieu of that does not classify as an employer-employee relation"? Then what classifies an employer-employee relation?
From India, Mumbai
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Then what classifies an employer-employee relation? Does an employee visiting "somewhere" and the employer still paying him/her constitute an employer-employee relation?
"Getting some money (from the employer) in lieu of that does not classify as an employer-employee relation"? Then what classifies an employer-employee relation?
From India, Mumbai
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Professional service providers also visit the establishment and get paid for it. For example, doctors visit nursing homes and receive payment. A midwife (aaya) attends the hospital and is paid by the guardians of patients. Professors are compensated with an honorarium for their special classes. Auditors and their staff visit the establishment at regular intervals and are remunerated for their services.
There are several types of individuals who visit regularly and receive payment, such as priests, cleaners, pest control service providers, delivery van drivers, and helpers. They are more punctual in their visits than regular employees. Are these individuals considered employees of their respective establishments?
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There are several types of individuals who visit regularly and receive payment, such as priests, cleaners, pest control service providers, delivery van drivers, and helpers. They are more punctual in their visits than regular employees. Are these individuals considered employees of their respective establishments?
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If the Act is applicable all the employees, except apprentices, should be covered if they work even for one day! Shrikant Prabhudesai
From India, Mumbai
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From India, Mumbai
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I do not like to keep it long in debate. The contract work agreement is still valid. Even the central government engages people off the roll for years and years. Unless a person comes on-roll, he is an external worker. The dictionary may always be defined in favor of the industry.
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Don’t forget for I’m where the discussion started, let’s not deviate from original query.
From India, Mumbai
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From India, Mumbai
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Don’t forget from where the discussion started, let’s not deviate from original query. Hi started about probation period.
From India, Mumbai
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From India, Mumbai
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@Shrikant_pra, yes, I am also standing on the very point. The original post did not mention that probation was on which term, and it was hidden that during probation what type of remuneration will be paid and what statutory deductions will be applicable. Also, it is hidden whether the person joining is getting a payout over 15k or not, so that a mandatory or optional clause can be enforced.
Just imagine for a probation letter where these terms are missing, and I would be grateful if you could share a format of any probation letter with these facts. Hiding a probation letter mentioning everything clearly that he will get "stipend" or "remuneration." If some establishment has mentioned it as salary or wages, then step forward to the labor commissioner; it would become applicable.
The original post maker made a joke, and he converted himself to anonymous now, and we are fighting over a non-issue.
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Just imagine for a probation letter where these terms are missing, and I would be grateful if you could share a format of any probation letter with these facts. Hiding a probation letter mentioning everything clearly that he will get "stipend" or "remuneration." If some establishment has mentioned it as salary or wages, then step forward to the labor commissioner; it would become applicable.
The original post maker made a joke, and he converted himself to anonymous now, and we are fighting over a non-issue.
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Let's check the SSC jobs details...
[SSC CGL 2017 Notification, Online Application, Eligibility Criteria](http://www.careerszine.com/ssc/cgl/)
From India, Nagercoil
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[SSC CGL 2017 Notification, Online Application, Eligibility Criteria](http://www.careerszine.com/ssc/cgl/)
From India, Nagercoil
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Dear US Sharma & Shrikant Sir,
First of all, I regret not sharing proper details. I believe that the discussion that has taken place on this post by all of you is providing us with knowledge on all aspects, and we are learning from it. Therefore, please do not consider it as if you both are arguing. Whatever you both have shared is knowledge for us readers.
Further, concerning your query on my offer letter, it is mentioned as "Salary" with bifurcations such as Basic, HRA, DA, Conveyance, Medical Allowances, and Special Allowances, and my salary is above the PF slab. However, regarding the PF part, both sides are not mentioned in the offer letter, and it was verbally communicated to me that it will start after completing the probation period.
I am wondering why PF is not starting from the very first day for a permanent employee. Why is there a condition that it will start after probation? Suppose it is to start after confirmation; should it begin from the first day or from the date of confirmation? In that case, can I raise my voice against it? What are my rights as an employee in this situation? Please guide.
Thank you.
From India, Mumbai
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First of all, I regret not sharing proper details. I believe that the discussion that has taken place on this post by all of you is providing us with knowledge on all aspects, and we are learning from it. Therefore, please do not consider it as if you both are arguing. Whatever you both have shared is knowledge for us readers.
Further, concerning your query on my offer letter, it is mentioned as "Salary" with bifurcations such as Basic, HRA, DA, Conveyance, Medical Allowances, and Special Allowances, and my salary is above the PF slab. However, regarding the PF part, both sides are not mentioned in the offer letter, and it was verbally communicated to me that it will start after completing the probation period.
I am wondering why PF is not starting from the very first day for a permanent employee. Why is there a condition that it will start after probation? Suppose it is to start after confirmation; should it begin from the first day or from the date of confirmation? In that case, can I raise my voice against it? What are my rights as an employee in this situation? Please guide.
Thank you.
From India, Mumbai
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Wonderful #ANONYMOUS salary limit is above the ceiling limit at the time of the interview and signing the offer letter. The employee did not bother to "raise a voice" but accepted it with a smile. I am very sure that in his/her CV and rejoinders, there is no mention of earlier PF details.
There is a certain amount added to your salary compartment as "special allowance." Have you even bothered to think about it? Why is this added? And why is this equivalent or at par, similar to the PF amount?
I request all of you not to make this platform a complaint box or a place to vomit personal grudges. Let it be useful to share knowledge for the benefit of both employee and employer.
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There is a certain amount added to your salary compartment as "special allowance." Have you even bothered to think about it? Why is this added? And why is this equivalent or at par, similar to the PF amount?
I request all of you not to make this platform a complaint box or a place to vomit personal grudges. Let it be useful to share knowledge for the benefit of both employee and employer.
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Who has a personal grudge? Me? I don't even know you and don't want to know a person who keeps on arguing on wrong lines. Period! Vomit? Speaks volumes about you.
Salary under the PF Act means only basic & DA. There have been judgments about the inclusion of all allowances for PF purposes. But let's not get into all that. If your basic is Rs. 15,000 or less per month, the employer has to deduct PF from your salary from your first pay. If it is more, it is the employer's wish whether to cover you or not.
From India, Mumbai
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Salary under the PF Act means only basic & DA. There have been judgments about the inclusion of all allowances for PF purposes. But let's not get into all that. If your basic is Rs. 15,000 or less per month, the employer has to deduct PF from your salary from your first pay. If it is more, it is the employer's wish whether to cover you or not.
From India, Mumbai
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