Hi Team, We are hiring for interns in our company where students will do internship for 6 months & this internship is included in their curriculum which is mandatory (Hired for Deemed university), we have decided to provide them an stipend of INR 10,000/-, do we need to deduct their PF/ESI?
From India, Jaipur
From India, Jaipur
No. Student interns are not covered by either PF and ESI Acts.Even apprentices under the Apprentices Act are not covered by the said Acts. B.Saikumar HR & Labour Law Advisor Navi Mumbai
From India, Mumbai
1899From India, Mumbai
1. Sir, use of words of any kind in respect of learners like-interns, trainers, learners, probationers, casuals or temporary etc. etc. is irrelevant so far coverage under ESI Act, 1948 is concerned.
2. Only the persons engaged under the provisions of the Apprentice Act, 1961( and that too only for periods as specified in said Act) are not covered under said Act by virtue of provisions contained in section 2(9) of said Act. The said Act was amended in the year 2010 in order to make the coverage position more clear. In EPF & MPs Act, the position may be slightly different since the said Act also recognises the position in respect of "Standing Orders of the establishment".
From India, Noida
2. Only the persons engaged under the provisions of the Apprentice Act, 1961( and that too only for periods as specified in said Act) are not covered under said Act by virtue of provisions contained in section 2(9) of said Act. The said Act was amended in the year 2010 in order to make the coverage position more clear. In EPF & MPs Act, the position may be slightly different since the said Act also recognises the position in respect of "Standing Orders of the establishment".
From India, Noida
I would like to elaborate my reply further on the issue. A student who is pursuing internship as part of academic curriculam stands on a footing different from trainees appointed under standing orders or apprentices appointed under the Apprentices Act as he still continues to be a student for all intents and purposes but not an employee. This trend in skill development as part of academic curriculam is currently being followed by many educational institutes and B-Schools. Therefore keeping in view this trend and to encourage it in the interests of the future of students, The P.F dept itself clarified in their circular no.coord/40(5) 2015/Misc/clarification dt. 12-10-2015 that such students will not be treated as employees and teh stipend to them will not be treated as wages for the purpose of PF Act which means they are excluded from the coverage of P.F Act.Hope this helps.
B.Saikumar
HR & Labour Law Advisor
Navi Mumbai
From India, Mumbai
B.Saikumar
HR & Labour Law Advisor
Navi Mumbai
From India, Mumbai
Nicely explained sir.
If at all they are appointed as an intern in mid of the curriculum then this will be applicable. What if they are appointed after their course completion? Even the educational institutions are not giving any letters as they are requesting for internship. How can it be treated as part of the curriculum? many companies hires freshers as Interns &later they are taking them into their roles.
From India, Bangalore
If at all they are appointed as an intern in mid of the curriculum then this will be applicable. What if they are appointed after their course completion? Even the educational institutions are not giving any letters as they are requesting for internship. How can it be treated as part of the curriculum? many companies hires freshers as Interns &later they are taking them into their roles.
From India, Bangalore
Yes, Jeeva, then the issue whether they are interns falling within the purview of exemption under the respective Acts or employees attracting the applicability of them need to be decided by the facts of each case. such as whether they are appointed under standing orders or Apprentices Act and the nature of their enagement and the nature of remuneration and the tenure/length of their engagement etc will be going to determine the issue.
B.Saikumar
HR & Labour Law Advisor
navi Mumbai
From India, Mumbai
B.Saikumar
HR & Labour Law Advisor
navi Mumbai
From India, Mumbai
Rightly said. It is on this basis that the Madras High Court, in Ramanarayan Mills Ltd Vs RPFC, has said that those apprentices who number like regular workers and who work like regular workers and share production incentive, cannot be considered as apprentices even though there is a provision in the certified Standing Orders of the company to engage apprentices and such apprentices are excluded from the coverage of EPF. Therefore, if you have a number of interns and you pay stipend to them, they will be considered as regular workers, perhaps engaged for a limited period. If the intention is good, that is allowing a student to undergo training as part of curriculum, then why do you pay a stipend? Let them do the work without stipend.
Madhu.T.K
From India, Kannur
Madhu.T.K
From India, Kannur
Dear Seniors,
I would just like to add as under:
Interns hired by the queriest, the internship in my view is a part of their study or syllabus. This internship is for specific period of six month as included in their curriculum. And therefore, there is no employee-employer relationship between the interns and the party hiring the interns.
For applicability of any of the Labour Laws, existence of employee-employer relationship is must. In given case, there is no employee-employer relationship, they can not be covered under EPF and ESIS. The queriest should establish no employee-employer relationship between both the parties.
From India, Mumbai
I would just like to add as under:
Interns hired by the queriest, the internship in my view is a part of their study or syllabus. This internship is for specific period of six month as included in their curriculum. And therefore, there is no employee-employer relationship between the interns and the party hiring the interns.
For applicability of any of the Labour Laws, existence of employee-employer relationship is must. In given case, there is no employee-employer relationship, they can not be covered under EPF and ESIS. The queriest should establish no employee-employer relationship between both the parties.
From India, Mumbai
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PF not applicable on CTC 18.3.2014.pdf