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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20I 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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HC All - Trainees not covered for PF -2010.pdf
PF Ledger.xls