1. Is it mandatory to deduct PF or ESI on stipend or consolidated salary?
2. Is it applicable to Delhi NCR or other states as well?
3. Can it be possible to deduct in factories only, or do we need to apply it to the head office as well?
From India, Gurgaon
12. Is it applicable to Delhi NCR or other states as well?
3. Can it be possible to deduct in factories only, or do we need to apply it to the head office as well?
From India, Gurgaon
Whether it is consolidated or Basic+ DA pattern of salary, PF/ESI is to be paid if the establishment and the employee are covered.
Under EPF, Delhi is not an exempted area, but please check whether the particular place in Delhi where the firm is situated is exempted under ESI.
Stipend paid to trainees other than those undergoing training under the Apprentice Act, 1961 attracts EPF and ESI contributions. However, there is a judgment withholding EPF organization from covering trainees even other than apprentices under EPF.
Regards,
Madhu.T.K
From India, Kannur
Under EPF, Delhi is not an exempted area, but please check whether the particular place in Delhi where the firm is situated is exempted under ESI.
Stipend paid to trainees other than those undergoing training under the Apprentice Act, 1961 attracts EPF and ESI contributions. However, there is a judgment withholding EPF organization from covering trainees even other than apprentices under EPF.
Regards,
Madhu.T.K
From India, Kannur
First of all, there is a difference between STIPEND and SALARY. Provident Fund is not deductible from STIPEND. The Provident Fund Scheme does not provide for deduction/contribution from STIPEND. The ESI Act provides for contributions/deductions from and on STIPEND. Please also note that a Consolidated Salary attracts the provisions of both PF and ESI - hence you are liable to deduct and pay contributions to both PF and ESI.
The Mitra
From India, Mumbai
The Mitra
From India, Mumbai
Salary is different from stipend. Salary or wages are paid to regular employees, casuals, temporary employees, or part-time employees and attract ESI and PF.
Stipend is paid to trainees or learners. Both Acts exempt trainees from the provisions of the Act. However, if the trainees are not proven to be trainees, then they will get covered.
Some Tests:
1. Are you defining productivity measures?
2. Are you conducting theory classes for them?
3. Are you maintaining records for these classes?
4. Are you evaluating them?
5. Are you making them come in shifts?
There are more questions. Refer to TISCO Judgment on this (Or is it TELCO?) This judgment clearly defines the rules to consider a trainee as a trainee.
I faced a problem in one company where trainees were not covered under PF. The PF inspector examined all records and even allowed us to make them come in shifts. However, when he examined the Productivity Linked Bonus scheme, it covered all trainees for calculating productivity. We had no other option but to cover these employees. I also had another experience where we could show all records of training. Still, we covered them under ESI. Quoting this, PF authorities asked us to cover them under PF. However, we took a firm stand that every enforcement authority should be concerned about their area only, and we succeeded in convincing them.
Siva
From India, Chennai
Stipend is paid to trainees or learners. Both Acts exempt trainees from the provisions of the Act. However, if the trainees are not proven to be trainees, then they will get covered.
Some Tests:
1. Are you defining productivity measures?
2. Are you conducting theory classes for them?
3. Are you maintaining records for these classes?
4. Are you evaluating them?
5. Are you making them come in shifts?
There are more questions. Refer to TISCO Judgment on this (Or is it TELCO?) This judgment clearly defines the rules to consider a trainee as a trainee.
I faced a problem in one company where trainees were not covered under PF. The PF inspector examined all records and even allowed us to make them come in shifts. However, when he examined the Productivity Linked Bonus scheme, it covered all trainees for calculating productivity. We had no other option but to cover these employees. I also had another experience where we could show all records of training. Still, we covered them under ESI. Quoting this, PF authorities asked us to cover them under PF. However, we took a firm stand that every enforcement authority should be concerned about their area only, and we succeeded in convincing them.
Siva
From India, Chennai
I am sorry I did not notice the questions from Delhi NCR. I have no personal knowledge. It must be applicable. Just check with your neighbors.
Your Head Office (HO) is an establishment, and all shops and establishments are covered under ESI in Delhi. Whether your factory is covered or not, your HO has to be covered.
Does this answer your query?
Siva
From India, Chennai
Your Head Office (HO) is an establishment, and all shops and establishments are covered under ESI in Delhi. Whether your factory is covered or not, your HO has to be covered.
Does this answer your query?
Siva
From India, Chennai
Dear Madhu sir,
What is the judgment withholding EPF Organisation from covering Trainees, even those other than Apprentices, under EPF?
Please provide an immediate reply on citehr itself or email me at
.
From India, Kochi
What is the judgment withholding EPF Organisation from covering Trainees, even those other than Apprentices, under EPF?
Please provide an immediate reply on citehr itself or email me at
From India, Kochi
ESI is mandatory to deduct from the stipend. However, PF may or may not be applicable to the stipend. This depends on whether there is an agreement, training scheme, or company's standing orders providing that PF would not be applicable to the stipend. If such provisions exist, PF would not be deducted. In the absence of such training schemes or standing orders, PF would be deemed applicable to the stipend.
From India, Delhi
From India, Delhi
ESI is mandatory on stipend; however, PF depends on whether there is any training scheme or company's standing orders that provide for PF applicability on stipend. If the training scheme or standing orders state that PF would not be applicable to trainees, then PF deduction is not mandatory. But if there is no training scheme or standing orders, the PF would automatically be deemed applicable on stipend, making it mandatory for PF deduction.
Thanks,
From India, Delhi
Thanks,
From India, Delhi
Dear colleague,
Kindly refer to the case published in "LLR-2006/263 in respect of RPFC Mangalore v/s Central Aercanut & Coka Mfg Co op ltd" in which, as decided by the Honorable Supreme Court of India on 3-01-06, PF is not applicable to Trainees.
Regards,
Dave
From India, Delhi
Kindly refer to the case published in "LLR-2006/263 in respect of RPFC Mangalore v/s Central Aercanut & Coka Mfg Co op ltd" in which, as decided by the Honorable Supreme Court of India on 3-01-06, PF is not applicable to Trainees.
Regards,
Dave
From India, Delhi
ESI on stipend or training allowance is disputable. ESI is mandatory only in the case of a 'worker' or an 'employee'. A trainee is neither a worker nor an employee. The SC's orders defining a trainee in the case of EPF will be applicable to trainees in the case of ESI also. However, as in the case of EPF, there should be Standing Orders of the company certified by the Labour Department of the State Govt.
S. Krishnamoorthy
From United States, Roslindale
S. Krishnamoorthy
From United States, Roslindale
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