Is PF applicable for Trainees in an IT company?

Is PF applicable for Trainees of 6 months in an IT company? After training, they will be on probation period and then only they will be a confirmed employee.

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Hi @Aprajita

" Trainees are not employees, the Supreme Court has ruled that they are not entitled to provident fund. Trainees , who are paid a stipend during the training period, have no right to employment, and it is for the employer to offer or not to offer a job to them, it said." Considering this they are not a part of PF.

But once they are onboarded as Probation employees and fulfilling the PF criteria, they are eligible for the same.

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Hi
Answer is no… But if the “trainee is not a student and not egnaged under the apprentice act”, he/she will be covered under the EPF & MP Act as per S (b) and S (e) of the act.

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Hi Aprajita,

If you are hiring them as Trainee on Stipend then PF will not be applicable.

There are companies who hire as an employee and give designation of Trainee then they will be treated as Employees and PF will be applicable.

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Dear @Ankit,

So, in GreytHR if we add any employee as Trainee and enter his/her remuneration under Payroll -> Salary as “Stipend”, then we do not have to go for any PF or ESIC. Is my understanding correct? Your advice on this matters most. Thanks!

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Hi @shefalipatil Just to give a heads up, while adding the employee itself you will get a PF checkbox for enrol, based on that PF gets calculated.

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@Dineshand @Ankit,

What I want to ask is, if “Trainee” is added in GreytHR with “Stipend” component under Salary with NO PF enrolment., and the “Stipend” is Rs. 15,000, then would we be violating any rules /laws under PF or ESIC? Thanks.

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Dear Sir/madam,

One of the employee of my client wants to contribute to the VPF( Voluntary Provident Fund). As per the company policy PF is contributed as per the PF provisions upto 15000. I need clarification on

  1. how to enable VPF for an employee contribution in GreytHR and whether company also should contribute the same

  2. Can an employee contribute PF on Actual Basic first and then do VPF or we can do VPF apart from regular PF contribution upto 1800 pm.

  3. challan for VPF - can we update in GreytHR and upload to PF website or we need to generate separate challan in PF Website for VPF.

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Hi Manjunath,

As the name suggests, Voluntary PF is PF contribution by an employee, over and above the mandatory deduction (i.e. over and above the percentage specified by the government). Generally, an employee indicates to the company or payroll people a willingness to contribute to VPF. In this case, the VPF deduction is done. This deduction is purely from the employee’s perspective and the employer has no connection to this.

If there is no component VPF under Total deduction on your salary page. Please reach out support team to activate the VPF component.

Please find the below path to update the VPF amount.

Login to greytHR application>> Click on Payroll>>Payroll inputs>>salary>>Select employee>>Total deduction>> VPF >>Edit>>update the additional amount>>and Save

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Hi @shefalipatil

We can create the Employment Status as “Trainee” similar to how we create Consultant/Retainers in GreytHR.

Also, communication of appointment of Trainee should be very clearly drafted.

Avoid creating any Employee - Employer relationship with Trainees because if this exist then He/she will be treated as Employee and not a Trainee thus all the statutory acts will be applicable.

What We do - We do not add Trainees on GreytHR, manage them separately and once we give them formal appointment letter then only we add them on GreytHR. Also we don’t keep any Trainee more than 3 months and in rare cases 6 months; after internship period either we Hire them or end the internship.

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Dear @Ankit,

Thank you soooo much for detailed reasoning! Your contribution on various topics really helps!

Thanks and regards,
Shefali

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Thanks all for reply. It clears the doubt.

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