Dear Seniors,
We are an Engg firm- India Pvt ltd, having +1000 employees. We are planning to hiring two three engineer who has completed hi B.Tech 8-9 Yrs back.
So we are trying to hire on Trainee/ Intern / Stipend.
So my doubt is whether we need to deduct PF as they are trainees and under probation ?
or we can start pf dedn on completion of one year training and probationary period. Please clarify
Regards,
From India, Faridabad
We are an Engg firm- India Pvt ltd, having +1000 employees. We are planning to hiring two three engineer who has completed hi B.Tech 8-9 Yrs back.
So we are trying to hire on Trainee/ Intern / Stipend.
So my doubt is whether we need to deduct PF as they are trainees and under probation ?
or we can start pf dedn on completion of one year training and probationary period. Please clarify
Regards,
From India, Faridabad
All trainees other than those under Apprentices Act and the Standing orders of the company are employees and they shall be covered under PF. Varghese Mathew
From India, Thiruvananthapuram
912From India, Thiruvananthapuram
Similar question was asked earlier at this link: https://www.citehr.com/279601-please...ts-during.html
Coming back to the question asked. Should PF be deducted from salary of such interns/probationers etc. or not? Ideally speaking NO. But Practically speaking YES.
See. Ideally, such persons can't be in any manner termed as employee of the company because then the distinction just vanishes away. Its with the belief that in future if their performance is found satisfactory then such personnels will be subsumed as an employee and then only exclusive employee benefits should be made available to him.
But wait. What legislation lays down is a term "Excluded employee" and through that a person earning below Rs 6500 is not to be covered under PF. Clearly engineers will be paid much higher than this Rs 6500 a month so this door stands closed. If we go by the intent of the legislation then we must deduct PF as been held by SC too in Andhra University v. R.P.F.C (1985) in line with the preamble of the legislation.
Now lets see practical aspect of this. You got already 1000+ employees meaning thereby good size company. For deducting additional PF for 3 trainees won't make a difference. But you won't be having anything to prove if Inspector visits your office and questions such non deduction. The cost of non-deduction will be far more than cost of deducting as in any case he won't be submitting like that and then you must have good legal team and then case to go to tribunal or something. Is it even worth it? Plus, we all know that nomenclature of trainee etc. is only for distinguishing probations, notice period, increment, termination periods. Not in work sense at all. So lets see the way legislation wants us too and reduce the confusion and resulting impact on us.
From India, Gurgaon
Coming back to the question asked. Should PF be deducted from salary of such interns/probationers etc. or not? Ideally speaking NO. But Practically speaking YES.
See. Ideally, such persons can't be in any manner termed as employee of the company because then the distinction just vanishes away. Its with the belief that in future if their performance is found satisfactory then such personnels will be subsumed as an employee and then only exclusive employee benefits should be made available to him.
But wait. What legislation lays down is a term "Excluded employee" and through that a person earning below Rs 6500 is not to be covered under PF. Clearly engineers will be paid much higher than this Rs 6500 a month so this door stands closed. If we go by the intent of the legislation then we must deduct PF as been held by SC too in Andhra University v. R.P.F.C (1985) in line with the preamble of the legislation.
Now lets see practical aspect of this. You got already 1000+ employees meaning thereby good size company. For deducting additional PF for 3 trainees won't make a difference. But you won't be having anything to prove if Inspector visits your office and questions such non deduction. The cost of non-deduction will be far more than cost of deducting as in any case he won't be submitting like that and then you must have good legal team and then case to go to tribunal or something. Is it even worth it? Plus, we all know that nomenclature of trainee etc. is only for distinguishing probations, notice period, increment, termination periods. Not in work sense at all. So lets see the way legislation wants us too and reduce the confusion and resulting impact on us.
From India, Gurgaon
Trainees are also covered under the EPF act. You have to deduct PF.
Even otherwise also, The PF act is welfare legislation, it has welfare provisions of Pension, Insurance etc. in the interest of the employee, it is always better to cover all trainees/stipend persons.
From India, Hyderabad
Even otherwise also, The PF act is welfare legislation, it has welfare provisions of Pension, Insurance etc. in the interest of the employee, it is always better to cover all trainees/stipend persons.
From India, Hyderabad
Mr Sarin Where in the EPF Act it is said that employee earning below Rs 6500/-a month is not to be covered under PF as posted in your third para above.? Varghese Mathew 09961266966
From India, Thiruvananthapuram
From India, Thiruvananthapuram
Good Evening,
Reference your query, even the trainees/engineers are eligible for PF contribution.
However you have the following options:
a) If their Basic+DA is less than Rs.6500/- pm then under PF act and Apprentice Act PF is mandatory.
b) If their Basic+DA is more than Rs.6500/- then the employee may limit employee contribution to PF @ Rs.780/- by submitting a letter to HR stating the same OR if employee was not enrolled in PF in the last company; then they can fill Form 11 and that will be sufficient to exempt them from PF altogether.
Hope this helps.
Warm regards,
Deena Jagasia
From India, Mumbai
Reference your query, even the trainees/engineers are eligible for PF contribution.
However you have the following options:
a) If their Basic+DA is less than Rs.6500/- pm then under PF act and Apprentice Act PF is mandatory.
b) If their Basic+DA is more than Rs.6500/- then the employee may limit employee contribution to PF @ Rs.780/- by submitting a letter to HR stating the same OR if employee was not enrolled in PF in the last company; then they can fill Form 11 and that will be sufficient to exempt them from PF altogether.
Hope this helps.
Warm regards,
Deena Jagasia
From India, Mumbai
If the payment to trainees is more than 6500/-Rs pm and if they were not earlier in EPF then you need not deduct contribution from their stipend,but obtain form 11 from them.
Varghese Mathew09961266966
From India, Thiruvananthapuram
Varghese Mathew09961266966
From India, Thiruvananthapuram
Hi Puneet,
I am agreeing with you.
I was trying to know the fact which is legally correct and valid. When we are hiring an employee paying salary of more than 20 K month and nor deducting the PF, as ther are trainees , and being as office Engg consultancy , we don’t have certifying Standing Order and not registered with Apprentice Act 1965.
Otherwise you suggestion is wise.
Thanks for your time
From India, Faridabad
I am agreeing with you.
I was trying to know the fact which is legally correct and valid. When we are hiring an employee paying salary of more than 20 K month and nor deducting the PF, as ther are trainees , and being as office Engg consultancy , we don’t have certifying Standing Order and not registered with Apprentice Act 1965.
Otherwise you suggestion is wise.
Thanks for your time
From India, Faridabad
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PF Judgement - SC - Trainee - 2006.doc
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