getifyhr, Author at GetifyHR

How to avoid/reduce latecomers in the industry/establishment?

Employers expect employees to be punctual in their work. Being punctual goes a long way in establishing greater workplace harmony and paves the way for establishing a better employer-employee relationship. Factors like excessive traffic, late running of trains or buses, or some unexpected family issues can sometimes make employees come late to work.

When these are not regular it is a non-issue but when coming late to work is habitual, then it becomes a serious issue and has to be nipped in the bud. Chronic lateness affects the workplace atmosphere and will contribute to significant time and cost implications that will have a negative effect on the company’s growth.

Being late regularly costs the company in payroll and has a negative effect on productivity. If this late coming remains unchecked it will set a bad example for other employees who may also be encouraged to start coming late for work. In this article, we offer tips to deal with habitual latecomers.

1. Frame proper ground rules

Establish a set of rules on coming late to work and communicate this to all the employees.

The policy should include:

• Employer expectations on the working time and the importance of starting work at the scheduled time.
• Avoid un-informed or non-approved late arrivals during work as this will disrupt the work atmosphere.
• Clearly define the consequences of arriving late to work.
• Decide on how to compensate for the time missed out by working extra during later working hours?
• The procedure for reporting late to work should include the details of the higher-ups who should be notified about coming late to work and when.

2. Take action immediately

When you identify a pattern of habitual late coming, don’t postpone speaking to the employee. The earlier you begin a dialogue with the habitual offender the better.

3. Talk to the employee and make your expectations clear

Sit with the employee and clearly explain what your expectations are and the consequences of coming late to work habitually. Present the facts and try to identify the reasons for the habitual late coming.

4. Set self-improvement goals

Once the discussion is over and you have explained your expectations and the consequences encourage the employee to set self-improvement goals. This should help the employee to break the habit and be on time or on the contrary you can suggest a reduced lunch break to compensate for the lost time.

5. Check for changes and show appreciation

Follow up on the discussion by encouraging the employee to overcome this habit of tardiness. Show that you care for his well-being and be appreciative of improvement in their habit. Appreciation sets the path for greater improvement and this may help to solve the problem.

6. Maintain a record of all discussions and interactions

Maintaining a record of the interactions with the employee will ensure that there are no miscommunications and leaves no room for any misunderstanding at a later date. Documenting the discussions and the steps taken to identify and correct the issues and the changes in the employee’s performance can be pinned to the employee’s HR file.

7. Enable automatic shutdown of the swiping machine after a particular period.

This is a very strict method used in some establishments. Activate automatic closure of the Swiping machine after the normal login time plus the grace time given for logging in has to be. If an employee reaches the workplace after the grace time, he has to get approval from the Manager/Supervisor and will be then allowed inside the premises using their password. This strict measure will ensure discipline.

8. Implement a ‘Send Home’ policy

Here the habitual latecomer is sent home when he or she arrives late for work. Warnings about earlier tardiness should precede this action. This will enable the employee to make a serious effort to reach on time as there is the fear that he or she would be sent home and would be marked absent.

Normally a grace period, say 15 minutes is given to every employee. If the employee doesn’t arrive within this grace period then he/she will be asked to go home. This ‘go home’ policy is a very effective tool in curbing the issue of coming late to the office.

9. Link punctuality with performance reviews.

Linking punctuality with performance reviews can also address the issue of habitual late coming. Performance reviews are important as it sets the tone for climbing up the ladder. Therefore, if your performance review is positive then the chances of moving up the ladder are greater. If you are a habitual latecomer it will reflect in your performance review and this in turn will negatively impact growth within the establishment.

10. Have a policy with a flexible work schedule.

Having a company policy that allows for a flexible work schedule is another option to handle the issue of habitual latecomers. For example, you can have a policy in place where the habitual latecomer is allowed to come late with the condition that this time is compensated during the day’s work schedule. This will help to avoid loss of working hours due to late coming. However, the problem with this policy is that when you allow it to one employee you should be prepared to allow it to others also.

Conclusion

Habitual latecomers harm the workplace and they may adversely affect the growth of the establishment. Therefore, it is in the interest of the employer to find ways to reduce this activity so that there is greater harmony in the workplace. The measures explained above will go a long way in reducing the issue of habitual late coming and set the tone for better employer-employee relationships.

GetifyHR, one of the leading outsourcers of payroll and HR management in this region has been able to guide our clients in successfully handling the issue of latecomers. Our solutions have enabled a large section of our clients to focus on core business activity thus enhancing growth. We are here to reduce the stress attributed to payroll and HR management.

January 23 is the right time to outsource your Payroll to GetifyHR!

January 2023 is the right time to outsource your Payroll to GetifyHR!

When is the right time to outsource your Payroll? Well, this is the question that has put business owners in a real dilemma. On the one hand, they have to be right with the timing and on the other hand, they have to be right with the choice of the perfect outsourcer. A difficult task indeed for any establishment whether big or small.

Payroll processing is one of the most important non-core activities and will remain so in the future. Its importance has manifested in companies opting to outsource the process with the view to not only bring greater accuracy but also to keep the company fully compliant with all the Statutory Compliance rules and regulations. By doing so establishments have been able to create greater harmony in the workplace and have been on the right side of all tax and compliance laws.

The goal of every establishment is to achieve greater growth and as it grows the greater the need to have a perfectly working system to handle all compliance issues. This is not an easy task and one way to keep things moving smoothly is by outsourcing this process to a service provider. By outsourcing payroll, companies will be able to prioritize core business processes and strategies to guide the business toward its goal.

In this article, we will discuss the ideal time to outsource the payroll process to an external service provider and why GetifyHR would be the best choice to undertake the process.

When to Outsource your Payroll?

The beginning of the year is the ideal time to go live with your payroll processing. While this may not be the beginning of the financial year followed in India, which is from 1st April onwards, we at GetifyHR would recommend the month of January to go live with payroll processing through a service provider.

This is the time when employees normally resign and move on to greener pastures. Hiring new hands and retraining them is a task that most establishments shun and the sensible solution is to perfect the payroll processing activity so that you can avoid hiring employees for both the core activity and to exclusively handle the payroll process.

When you start your payroll process through an outsourcer during the month of January, you have a clear 3 months to complete the parallel runs and perfect the system. This allows the time to verify and correct all employee records and reports and streamline the demands of statutory compliance.

This will enable you to start the new financial year on a clean slate and give you adequate time to straighten all loose ends and see that you are starting the process perfectly.

The benefits of outsourcing the payroll!

Let’s briefly delve into the benefits of outsourcing your payroll processing to an external service provider. Payroll processing remains the most popular area among the non-core processes that organizations tend to outsource and their benefits are many.

1. Leads to lower Upfront Investment

One of the most important benefits of outsourcing Payroll is that it leads to lowering the investments upfront. Outsourcing helps in reducing the investment on costly hardware and accessories as the package relies on high-end cloud technology; therefore you can do away with costly hardware onsite.

2. Maintain accurate records

Having a perfectly running payroll that generates highly accurate payslips and all related records remains the top requirement of every organization. Payroll generated with errors can create great disharmony in the workplace and throw all activities out of gear. This will inevitably affect the growth of the organization. Outsourcing assures you of a perfectly running payroll process that will help you to maintain highly accurate records, and this will go a long way in promoting workplace harmony and enhancing growth.

3. Comprehensive Payroll Support

Outsourcing the Payroll ensures comprehensive payroll support. This means that all requirements of payroll and HR management are seamlessly handled so that your month-end stress is drastically reduced. The high level of integration that these packages achieve enables smooth and comprehensive payroll operations. All the modules are perfectly integrated thus reducing the need for frequent key-ins.

For the management the biggest need is to have access to an array of highly useful MIS reports as and when required, and this is what you get when you outsource. Armed with these reports, the management will be in a position to take timely decisions that would ultimately lead to greater growth.

Data security is a vital factor when you are handling sensitive employee data. In-house payroll processing may not be secure enough and the leak of sensitive data is always a possibility. When you outsource the process to a service provider, you can greatly reduce the possibility of a leak of sensitive data. Outsourcers have a robust security system in place with proper backup and multiple server locations to ensure a high level of data security.

4. Leveraging expertise to ensure compliance

Experts with deep knowledge of all payroll and compliance norms man outsourcing service agencies. By outsourcing you are shifting the onus of keeping the organization compliant to a team of highly efficient individuals. Outsourcing the payroll and HR process will enable companies to minimize compliance and regulatory risks. This will ensure that the company is compliant at all times.

There are a few more reasons why you should outsource your payroll to an external service provider. However, we shall take a detour from that topic and focus on why you should outsource to GetifyHR.

Why GetifyHR?

GetifyHR is one of the leading Payroll and HRMS outsourcing companies based out of Coimbatore. With a vast clientele spread across the country, we have been providing excellent service across states and platforms.

Our vision is to make GetifyHR one of the leading outsourcers in the industry. Simplifying the rather complex Payroll and HR operations has been our goal and this we have achieved through our commitment and dedication to providing the very best to our clients.

Ours is a highly efficient and fully functional module that can manage these complex operations in any organization. This is a high-end module using the latest cloud-based technology. The module fully automates the payroll and HR processes and empowers employees with a highly efficient self-service module. The important features of our module are briefly described hereunder.

Payroll Module

This is a module that simplifies the rather cumbersome and complex payroll process. The module is highly customizable and is fully integrated to maintain all the requirements of Payroll processing and HR management.

This includes generating highly accurate Payslips and the relevant reports, handling all statutory compliance requirements, and maintaining employee Leave & Attendance, and Recruitment. The module ensures the generation of accurate payslips and on-time disbursement of salaries every month. All reports required to keep the company compliant are readily available and it is only a matter of remitting the deductions to the authorities.

These activities can be performed without a hitch every month seamlessly and smoothly.

The module ensures accurate calculation of salaries and timely disbursement every month. This will pave the way for greater harmony within the workplace.

Salaries can be disbursed by cash, or cheque or can be directly transferred to the employees’ bank accounts
The payments can be released either Batch wise or Bank wise
Track the status of all cash and cheque payments.

Statutory Compliance Module

This module helps you to save precious time that you would have spent keeping yourself updated of the changes in compliance rules. The changes in EPF, ESI, and other labour laws are immediately updated in the system.

Similarly, changes in tax slabs are updated as and when announced so that the employees do not lose the benefit.

In other words, GetifyHR frees you from the burden of updating the changes in statutory rules and regulations and creates a stress-free month-end operation.

GetifyHR’s outsourcing module allows you to perform the following tasks:

Calculate PF deductions and generate ECR
Compute ESI
Calculate state-specific Professional Tax component
Calculate TDS and generate the returns
Generate Form 24Q, Form 16 and Form 12BA
LWF calculations and deductions
Bonus calculations.

Excellent Reporting

Our Payroll module provides access to more than 150 MIS reports. You can customize the reports for your specific needs. Additionally, payroll analytics provide insightful details that help you to take the right decisions at the appropriate time. The reports include…

A large array of MIS Reports
Reports and Forms for Statutory Compliance requirements
Reconciliation and other reports specific to the Accounts department.

Conclusion

The right time to outsource the Payroll and HR operations and make your choice of the right outsourcer is an onerous task for any business owner. Choosing the right time is best left to the management as they know their situation better than anyone else. However, we have suggested January to be the ideal time purely taking into consideration the beginning of the financial year. Taking such a decision would enable the user to be ready to go live beginning in April when the new financial year begins. But again the choice is best left to the management.

Choosing GetifyHR to outsource the Payroll process is again the ideal choice considering that we enjoy a sound reputation in the industry. We rank among the top outsourcers in the country with a large number of satisfied customers spread across the country. The user-friendly interface and varied functionalities incorporated in this package will not only provide accurate payslips and insightful reports but will also enable immediate updation of changes effected in compliance rules and regulations. We are here to simplify the task and amplify your vision towards greater growth.

When do we need to declare the Holiday List to the Labour Officer?

Introduction

We are closing in on the last few days of an eventful year. The excitement of celebrating Christmas and welcoming the New Year has never diminished and never will. But one set of people is busy formulating the New Holiday List for the forthcoming year.

Yes, HR managers in companies, both large and small are engrossed in preparing the holiday list for filing with the concerned Labour Officer at the end of the year.

Holidays are declared under the Negotiable Instruments Act, 1981. Though they apply to all government departments and more particularly Banks, all establishments in the public and private sectors irrespective of the laws under which they are formed have to adopt these holidays. It is mandatory to adopt a pattern of national and festival holidays in the country. In addition to these, there is the option of granting restricted holidays to employees.

National Holidays

The three National Holidays observed in India are Republic Day (Jan. 26), Independence Day (Aug. 15), and Gandhi Jayanthi (Oct. 2), however, in some states, May 1 (Workers Day) is also declared as a National Holiday. On these days all establishments irrespective of what law they come under should necessarily remain closed. If for some reason the establishment needs to function on these days, they need to get prior approval from the concerned authority. In case employees work on national holidays, then they are entitled to get double wages for the day. The laws regarding national holidays are subject to Central legislation, and some states have made provisions to claim compensatory leave or pay double wages for working on those days.

Festival Holidays

Festival Holidays are based on local festivals and, therefore, may differ from state to state and also could depend on the company policies. The number of holidays would differ from state to state based on the festivals celebrated in that particular state.

Restricted Holidays

A restricted holiday is an optional public holiday that can be availed by a particular set of employees celebrating a special occasion. On a National or Festival holiday, the entire establishment is closed, whereas; on a Restricted Holiday only a particular group of employees avail of the holiday.

A Restricted Holiday enables the organization to serve its customers with a fewer number of employees.

Employees on the other hand get the benefit of claiming paid leave of absence on 2 or 3 restricted holidays during the year. These restricted holidays are marked as optional in the holiday list and are valid only for the specific days mentioned therein.

Declaring the Holiday List

The employer has to submit the finalized Holiday List to the concerned authority for approval in the form as stipulated in each state. In Tamil Nadu, one has to get approval from the Asst. Inspector of Labour/Labour Inspector/Labour Officer. The details of the forms required for submission/acceptance given hereunder pertain to the state of TamilNadu.

The List Festival Holidays has to be submitted to the Labour Officer in Form No: I.

A notice in Form No: II has to be exhibited in the establishment and a copy has to be submitted to the Labour Officer. The form should specify the period within which objections or suggestions of the employees referred to in sub-rule (3) will be received.

Where the employer or a majority of employees or any trade union representing a vast number of employees desires a change in the festivals, they may apply to the Labour Officer in Form IV, in duplicate indicating the changes. The Labour Officer will communicate these changes to the employer in Form III in duplicate. The employer has to display a copy of this communication on the notice board within 7 days of receipt.

The employer should submit a statement under sub-rule (1) of rule 5 in Form V to the Labour Officer indicating the National and Festival Holidays allowed for that calendar year. The last date for submission of this form is 31^st of December every year. The employer has to display a copy of this statement in a prominent location on the premises.

In all 9 holidays have to be declared in a year (3/4 national holidays and 4/5 festival holidays). The number of holidays would vary from state to state as each state has its festivals and policies on approving holidays. The employer should submit the finalized Holiday List in the stipulated form to the authorities before 31st December of each year for approval.

Conclusion

Preparing the Holiday List and Leave entitlement of employees is a complex task that needs a lot of thought and effort. A lot of effort goes into framing the company’s leave policy and the HR team would be hard-pressed to achieve this task. GetifyHR has years of experience in framing such leave policies for organizations spread across the country and is also adept in formulating National Holiday and Festival Holiday lists across multiple states. Our Payroll and HR management module facilitates simplifying this task and makes it easier for handling the Holidays and Leave eligibility of employees. Associate with us now for seamless handling of all Payroll Processing, Statutory Compliance issues and Leave and Attendance management.

The Contract Labour (Regulation and Abolition) Act, 1970

Introduction

A contract labourer is one who is assigned to work in an establishment for a specific period through a contract by a contractor with or without the knowledge of the principal employer. They are indirect employees who are either paid daily wages or paid the accumulated daily wage at the end of the month. The contractor is responsible to hire, supervise and remunerate the contract labourers.

The practice of employing workers on a contract has been widely used in India for a very long time. Before and after independence the issue of contract labour has been a seriously analyzed topic and innumerable commissions, committees and even the Ministry of Labour have tried to identify the working conditions of such workers.

Studies have shown that contract labourers live in poor economic conditions and since their job is casual in nature they lack job security. Since there were no regulations and controls, the contract labourers were exploited for the gain of the employer and contractor. To regulate the employment of contract labour and free them from exploitation the government enacted a legislation called the Contract Labour (Regulation and Abolition) Act, 1970. On 10th February 1971, the Act came into force and will be applicable throughout the country.

Objectives and scope of this Act

The main objectives and scope of the Act are:

To prevent the exploitation of contract labour
To provide proper working conditions
To lay down the rules and regulations regarding the registration process of the establishments employing contract labour.
To state the requirements and the procedures of licensing contracts.

Who does the Act apply to?

The Act will apply to establishments under the following conditions:

Any establishment where 20 or more workmen are employed or were contracted as contract labour on any day during the preceding 12 months.
Any Contractor who employs or has employed 20 or more workmen on contract labour on any day of the preceding 12 months.

Establishments to which the Act does not apply

The Act does not apply to establishments that perform works of casual or intermittent nature

Seasonal work that is performed for less than 60 days
The work is considered intermittent if the work is performed for less than 120 days in the preceding 12 months.

Main Definitions

Principal Employer

The Principal Employer includes the head of any government or local authority, the owner or occupier, or the Manager of a factory (Under the Factories Act). The Owner, Agent, or Manager of a mine or any person responsible for the supervision and control of the establishment is also included.

Contractor

The Contractor refers to any person who supplies contract labour for any work to any establishment. This could also include the sub-contractor. A contractor to whom the Act applies has to take a license under the Act.

Establishment and Composition of the Advisory Boards

The Contract Labour (Regulation and Abolition) Act, 1970 provides for the establishment of Central and State Advisory Boards. The Boards are established to advise the Central and State governments respectively on matters concerning the administration of the Act and to carry out the functions assigned under the Act.

The Central Advisory Board

The Central Government constitutes the Central Advisory Board with representation from the Government, the Railways, the coal industry, the mining sector, the contractors, the workmen, and any other sector that is deemed fit by the government. The Central Government may nominate eleven to seventeen members to the Advisory Board. The Number of members nominated from the workmen’s side should not be less that the number of members representing the principal employer and contractors. Apart from these members, the Board consists of a Chairman appointed by the Central Government and the Chief Labour Commissioner.

The State Advisory Board

The State Advisory Board is constituted by the respective State Governments and consists of a Chairman appointed by the government, the Labour Commissioner of that State and in their absence the State Government will appoint any other officer.

Apart from these members, the State government may nominate nine to eleven members to represent the government, industry, contractors, workmen, and other members from any other sector that the State government decides. The number of members nominated to represent the workmen shall not be less than the members nominated to represent the principal employer and the contractors.

The Central and State Advisory Boards have the power to form committees under the Act as they deem fit. The committee will discharge their duties and responsibilities in accordance with the provisions of the Act.

Registrations of Establishments hiring contract labour

Every establishment that proposes to hire contract labour is required to obtain a certificate of registration from the respective government. The registration procedure is as follows:

The Establishment should submit the application in Form No.1 to the Registration Authority along with the receipt of payment of the prescribed registration fee.
If the application is found correct in all respects, the Registering authority can register the establishment and issue a copy of the registration certificate in Form II.
The Certificate of Registration will contain the name and address of the establishment, the maximum number of workers to be hired as contract labour, the type of business, and any other important particulars.

The Responsibilities of the Employer

The employer has to fulfill the following responsibilities:

Register the Establishment.
Engage contract labour only through licensed contractors.
Display a notice showing the name and address of the Inspector in English and the local language along with details of wages and date of payment of wages.
Should ensure that the contractor pays the wages as per the wages fixed by the government or as fixed by the Commissioner of Labour or in their absence pay fair wages.

Licensing of Contractors

Every Contractor who wishes to undertake or execute any work through contract labour is required to obtain a license from the Licensing Authority. This condition applies to a contractor who has employed twenty or more workers during any day of the month.

The Procedure for obtaining a License

The licensing authority issues the license under Sec.12 of the Act.

The contractor has to make an official request to the Licensing Authority along with the application form.
Deposit the appropriate security deposit.
The license will include such conditions as the hours of work, fixation of wages, and other amenities due to contract labour.
The application in the prescribed form should contain the particulars regarding the location of the establishment, the nature of the process, operation, or work for which contract labour is to be employed, and such other details.
The license is valid for the period mentioned therein and may be renewed from time to time for such a period. The relevant fee has to be paid.

Provide the following facilities:

A canteen to the contract labour when they employ 100 or more workers and the work is performed for 6 months or more.
Provide adequate urinals for men and women separately.
Provide drinking water, washing facility, first aid, crèche, etc.
Properly maintain the various registers and records
Maintain a separate register of Contractors in Form XII
File the required returns (Annual) to the licensing authority by 15th February of the year.

Responsibilities of the Contractor

The Contractor has the following responsibilities:

Has to get approval from the Principal Employer.
Has to obtain a license from the Licensing Authority.
Raise monthly Bills for payment to the contract labour.
Maintain all relevant Registers likeMuster Roll, Wage register, etc.
Has to pay the wages on or before the 7th of each month.
Disburse the wages in the presence of the representative of the employer.
Have to distribute employment cards to all the workers three days before the commencement of work.
Have to file the half-yearly return in Form XXIV after 30 days from the close of the half-year, i.e. June and December.

Penalties

Anyone who violates any clause of the Act or any of the rules under the Act will be liable to imprisonment to the extent of 3 months or with a penalty of One thousand rupees or both. If the violation continues then an additional fine of one hundred rupees per day for every day of contravention will be imposed.

Shortcomings in the Act that need change

The Contract Labour (Regulation and Abolition) Act, 1970 has several drawbacks that need to be addressed by the legislature for better implementation.

The Act does not differentiate between core and peripheral activities and this has led to non-implementation.
The Act applies to establishments employing 20 or more contract labourers. Establishments and contractors avoid this responsibility by employing less than 20 labourers.
Establishments misuse the provision by taking licenses under different names, a single-window system should be adopted for issuing the registration and there should be a licensing authority to handle the issue in every state.
The penal provisions of the Act are not deterrent enough and, therefore, principal employers prefer to pay the penalty rather than follow the provisions of the Act.
There is a need to extend the education scheme to contract labour as most of them are unskilled, illiterate, and ignorant of their rights.
As there are no direct or independent provisions under the Act to file for claims etc., these claims are filed under the Payment of Wages Act or Minimum Wages Act. This has to be included in the Act itself.

Conclusion

The Central Government enacted the Contract Labour (Regulation and Abolition) Act, 1970 to prevent exploitation of the contract labour by both employers and contractors. The Act provides them with certain rights as contract labour and gives them a legal provision to demand their just dues. However, the shortcomings have to be addressed and must be legislated so that necessary changes can be made to strengthen the provisions. There is also a need to make the Act less complicated for the principal employers and contractors and with provisions for better safeguards and amenities to contract labourers.

GetifyHR, with its years of experience in handlingPayroll and all Statutory Compliance rules and regulations, have assisted clients in handling their requirements of contract labour. We expertly handle all issues pertaining to the employment of contract labour, and establishments have gained from our expertise in the eficient handling of contract labour. Our high-end, cloud based Payroll module is capable of handling these issues in a seamless manner, making it easier for organizations to have the relevant details at the click of a button, as and when they require it.

Tamil Nadu Labour Welfare Fund New Amendment

The Tamil Nadu Legislative Assembly introduced a Bill in the Legislative Assembly of the State on 6th September 2021, called the Tamil Nadu Labour Welfare Fund (Amendment) Act, 2021. The Act amends the Tamil Nadu Labour Welfare Fund Act, 1972 with regard to the contribution towards the TNLWF. By this amendment, changes were made in the contribution towards the fund from the employee, employer and the government.

However, by the Notification issued by the Government of Tamil Nadu vide G.O. Ms. No.160 dated 2nd December 2022, the amount of contribution has been further substituted as follows:

1. The employee contribution has been substituted from the earlier sum not exceeding ₹ 10 per year to a sum not exceeding ₹ 20 per year.

2. The employer contribution has been substituted from the earlier sum not exceeding ₹ 20 per year to a sum not exceeding ₹ 40 per year.

3. The Government contribution has been substituted from the earlier sum not exceeding ₹ 10 per year to a sum not exceeding ₹ 20 per year.

G.O Copy link

Changes have been introduced in various labour laws across the country and most companies are hard-pressed to keep track of these changes. GetifyHR has been providing highly efficient service to companies to handle Payroll Processing, Leave and Attendance, Statutory Compliance requirements, etc. Importantly, GetifyHr has enabled companies to be fully updated of all the frequent changes in the different labour laws in operation across the country. With our high-end, cloud-based payroll module we have been able to keep our clients fully compliant of all the statutory rules and regulations.

EPF and ESI Inspection criteria and the documents to be produced before the Inspectors!

The need to ensure social-economic justice for the people and establish a Welfare state is enshrined in the Constitution of India. Employees, especially in the private sector found themselves in trouble once they retired.

To alleviate this problem the government introduced a long-term savings scheme that would support them in retirement or superannuation. This legislation is the Employees’ Provident Fund & Miscellaneous Provisions Act, 1952 (EPF and MP Act).

Similarly, there was a need to safeguard the lives of employees against the effect of sickness, physical disability, and death due to the nature of work. The Employees’ State Insurance Act, 1948 was legislated by the government to take care of this aspect. This Act supports them during such eventualities.

Inspection Policy for EPF and ESI

Both these Acts have proper guidelines on the inspection of the registered entities under the Act. In this article, we shall delve into the criteria for inspection and the documents that are required to be produced during such inspections.

EPF Inspection criteria

Inspection guidelines have been passed to achieve the objectives of simplifying business regulation and bring in transparency and accountability to labour inspections.

The inspections can be either mandatory or optional.

Mandatory Inspections

Inspections are mandatory under these conditions:

All new covered/registered establishments are prone to mandatory inspections.
All establishments registered on the Electronic Challan cum Return Portal (ECR) that are not marked as closed and are not complying.
All establishments that have sent in a closure request.

Optional Inspections

Optional Inspections are undertaken under the following conditions:

When the remittances towards EPF drop in excess of Rs:10,000
Membership drops in excess of 50 members
All other units where there is a weightage drop of 20%.

Inspection procedure

Normally the establishment is informed about the inspection and these are carried out during normal working hours. At the time of inspection the following documents have to be produced:

A 100-page notebook that is generally available in Labour Law Stationery Book stores should be kept ready for the Inspector to note his/her remarks. All other records/registers in respect of EPF have to be submitted for inspection and they are:

Attendance Register or Muster Roll
Wage/Salary Register
Bank Statement
Ledger/Cash Book/Vouchers
Copies of the Audited Balance Sheet
Challan Copies
EPF Code Allotment Letter & Form 5A
Bonus Register
Overtime Register
Active UAN List
List of Contractors, nature of work, and compliance made by the

The Inspector, after the inspection, has to note down his/her remarks in the Inspection Book and sign the same.

ESI Inspection criteria

ESI Inspections also follow the same pattern as EPF.

All new units that are covered/registered.
All establishments that have defaulted for a period of 6 months
Units that have made closure requests.
Units where no inspection has been carried out in the last 3 years.
Whenever such inspection is required by Central Data Analysis Unit (CDAU).
When there is a 30% drop in the contribution when compared to the previous contribution period. The top 30% of such units will be inspected.
When there is a drop in the number of employees by 30% and above when compared to the previous contribution period (over a period of 6 months). The top 30% of such units are to be inspected.
Security/Manpower agencies that employ more than 250 employees where inspection has not been conducted in the last 2 years. The top 30% of such units are to be inspected.
Any other units that do not fall into any of the above categories. The top 10% of such units are inspected.

Inspection procedure

Normally the units are informed about the inspection and these are carried out during normal working hours. At the time of inspection the following documents have to be produced:

Attendance Register
Wages or Salary Register
Bank Statement
Ledger/Cash Book/Vouchers
Copies of the Audited Balance Sheet
Challan copies
ESIC Form 32 register
Accident Book under Rule 66
All other documents related to payments made to employees
List of Contractors, nature of work, and compliance made by them.

Conclusion

The Inspection procedure for both EPF and ESIC are very similar. The Registered units have to be fully prepared with all the relevant records/registers during the time of inspection. Non-availability of such records or registers will be viewed seriously and the authorities are empowered to take strict action against such units.

GetifyHR, which has years of experience in handling these matters can provide the ideal solution for companies to go through these procedures without any stress. Our Payroll and HR module can provide all the required inputs to the authorities as and when required and in the process keep the company fully compliant at all times.

Outsourcing Payroll Services: What to expect when you modernize your Payroll Processes?

Introduction

Payroll processing is a daunting task in any business regardless of the size of the workforce. The process involves highly critical tasks other than generating the payslips and disbursing the salaries. Managing Leave and Attendance has always been a complex task and businesses have to face the consequences of errors in handling this crucial activity. Even more daunting is handling the Statutory Compliance rules and regulations. Any errors in handling this vital task could lead to penalties and other legal issues.

A fully integrated Payroll System ensures the smooth functioning of the business and this would lead to greater growth. Outsourcing the Payroll process to an outside agency is the ideal solution as it ensures stress-free operations and helps in addressing the loopholes found in handling payroll either manually or through custom-made software operated by one’s team. The advantages of outsourcing your Payroll process are many and have been discussed in our earlier blogs. In this article, we will limit ourselves to discussing what you can expect when you modernize your payroll process by outsourcing to a reputed third-party service provider.

Impact of Technology

Technology is impacting every walk of our personal and professional life. The pandemic has demonstrated our reliance on technology to keep society and businesses running normally. Not only business transactions but also employees were moved online and payroll services have also been immensely affected. GetifyHR has established itself as a leading player in outsourcing payroll processing using cloud technology.

Cloud Computing

Payroll outsourcing services have embraced the latest in technology to offer greater functionality and performance of their modules. The use of cloud computing has dramatically changed the ways that data is accessible not only from one location but also from multiple locations. Processing and backup is now fully automated.

This has enabled businesses to enter and approve payroll operations across locations. Adopting a cloud-based system has many benefits and the key benefits are briefed here below:

Greater Accessibility

Every branch, every office, and every factory across the states are easily connected. This provides improved access to data and everyone can get up-to-date information whether they are in the office or on the go.

Cut down on costs by reducing the use of costly hardware and software

With the use of cloud computing, you can do away with costly servers, backup generators, network switches, routers cables, etc. All the payroll activities can be handled on the cloud by just paying a monthly fee. This reduces expenses dramatically.

Keeping the company compliant

Statutory Compliance is a vital activity that needs extra care and awareness of the changes in rules that are frequently affected by the government. These changes have to be updated immediately so that the company can remain compliant. Failure to do so will result in penalties and lead to legal issues that the company may well neigh avoid. These issues will also damage the cordial employee-employer relationship. The technology in use now allows the employee to have greater access to their records through a highly efficient ESS portal that is available on the system and their smartphones. GetifyHR is one of the leading HR Outsourcing Services in the country with a reputation for top-notch service

Eliminate repetitive tasks

Payroll processing is a highly repetitive task, especially when using Excel spreadsheets or any customized software. When you outsource to a service provider who uses cloud computing, you are fully automating these time-consuming tasks by leveraging the best of technology. This will bring about a significant reduction in errors and enhance the performance of the administration.

Identify and reduce fraudulent practices

The use of current technology like cloud computing enables the employer to identify whether the employees are billing for hours that they have not worked. With the available data, employers can determine whether an employee is reporting excessive overtime or is abusing sick leave. The available payroll analytics provides employers with trends in employee behavior and information that they need to take corrective measures.

Enhance HR functions

The use of high-end technology in payroll software generates a wealth of information that was previously not available to the user. With the help of the present technology, we can mine this huge volume of data for strategic decision-making purposes. This wealth of information will enhance the HR experience and aid in workforce planning, performance, gender pay equalities, benefits and pensions, and onboarding.

Conclusion

The currently available technology offers the scope for bettering the payroll system under use now. Embracing this technology will offer solutions that will enhance the payroll experience for the company and its employees. Employee retention is very important in today’s labor market. Any small error in payroll preparation would cause employees to leave and this would disrupt the functioning of the workforce and adversely affect the company’s performance. A perfectly working payroll is the need of the hour and this can be achieved only when you have a system that uses the latest technology that is available now. We at GetifyHR are committed to offering the best to our clients and to achieve this we are constantly upgrading our outsourcing module to be in line with the latest technology.

What are the multiple leave types and their entitlements as per the Labour Acts?

Introduction

Labour laws have been enacted to safeguard the interests of the employees and these required the employers to follow certain statutory rules and regulations. These laws signify the relationship between the employer, the employee and the governments, both central and state. The trade unions also play their part in framing these rules especially when it comes to implementing them in various organizations. The Factories Act, 1948, the Shops and Establishment Act, and the Maternity Benefit Act, 1961 have set the policies for the types of leave that an employee can avail.

Some of these laws contain the provisions for different types of leave that the employees are entitled to take during their period of employment. The applicability and duration of these leaves may slightly differ from state to state and from company to company. However, in general the most common types of leave are Casual Leave, Earned Leave, Sick Leave, Maternity Leave and Compensatory off Leave. A few other leaves like Paternity Leave, Marriage Leave, and Bereavement Leave are also available but these would depend upon the leave policies followed by the company and would, therefore, differ from company to company. The implementation and applicability of the leaves types are detailed below.

Casual Leave

Casual is a leave that an employee can avail due to some urgent or unforeseen personal needs or circumstances. Prior permission is required for this leave and any leave that is taken without permission would result in deduction of salary for that particular day. The number of days that can be availed is decided by the company though most states have framed laws for providing such leave. Normally the leave could range from 12 to 15 days in a year and would also depend on the type of industry. In Tamilnadu the Casual leave entitlement is 12 days in a year.

Earned Leave

Earned Leave or Privilege Leave is a type of leave entitlement that an employee can avail when they complete one year of service. Earned Leave is used for personal reasons such as in taking a vacation, or to conduct certain functions or festivals that are not declared holidays. Earned Leave can be encashed, which means when you leave the company, you can encash the number of days of unutilized earned leave. The value of one days earned leave is equal to one day’s Basic salary + DA.

Factory workers who have worked for a maximum of 240 days in a year are eligible for Earned Leave. An adult worker is entitled to 1 days earned leave for every 20 days of work, whereas, children under 15 get 1 days earned leave for every 15 days worked. Employees involved in Sales or in the Newspaper industry is entitled to one month’s leave for every 11 months worked.

Since this type of leave is long and is normally planned for earlier, prior permission is required. The administration has to be informed well in advance so that they can make alternate arrangements during the absence. The unavailed earned leave balance is carried forward to the next year. However, the number of days that can be carried forward may differ from state to state. For example, in Tamilnadu, the maximum earned leave that can be carried forward is 45 days, whereas, in Kerala it is 24 days.

Sick Leave

Sick Leave can be availed by the employee when they fall sick. The employee has to produce a medical certificate to avail this leave if the leave exceeds two or three days at a time. The normal entitlement is 12 days sick leave during a 12 month period.

Sick leave can be carried forward and in some cases it can be encashed at 50% of the basic salary for a day. An apprentice is entitled to 15 days sick leave in a year whereas, and employee of t he Newspaper industry can avail one month sick leave for every 18 months work.

Maternity Leave

Maternity Leave is a benefit allowed to women employees under the Maternity benefit Act, 1961. The Act ensures that women employees can avail the benefit of 26 weeks leave during the pre and post delivery period. This is a paid leave and during this period the employee will be paid Basic salary + DA. The women employee can opt for 8 weeks pre delivery leave and the balance post delivery leave. This is applicable only for and 1^st and 2^nd delivery and a woman employee expecting a 3^rd child is entitled for only 12 weeks maternity benefit.

A woman employee who adopts a child is entitled to 12 weeks maternity leave starting from the day of adoption. This is applicable only when the adopted baby s below three months of age. Similarly, a commissioning mother ( a biological mother who uses her egg to create an embryo implanted in a surrogate mother) will be entitled to Maternity benefit for a period of 12 weeks from the date the baby is handed over to the commissioning other.

A woman employee who has undergone Tubectomy during pregnancy can avail 2 weeks leave from the date of the Tubectomy procedure. For employees who undergo critical conditions like Pre-mature delivery, miscarriage and medical termination of pregnancy, one month’s maternity benefit is applicable.

Paternity Leave

Paternity Leave is a leave entitlement to expectant fathers after the child is born. This again depends on the company’s leave policy. The leave entitlement is for 2 to 4 weeks. Though this leave is not mandatory, it is important that the HR’s understand the stress involved in bringing up a new born baby during the first few days and allow such leave to the expectant fathers.

Marriage Leave

Marriage Leave is not mandatory in India. This would depend on the company’s leave policy. Most companies tend to give 3 days’ marriage leave with the employee asked to provide documentary proof in the form of an invitation or a marriage certificate for its approval. An employee is eligible to only one Marriage Leave during the entire period of employment in the company.

Bereavement Leave

In the event of a death in the family, Bereavement Leave can be granted. Though it is not mandatory, compassionate leave as it is also called can be granted to allow the grieving employee to participate in the last rites and take care of other personal issues. Companies that are forward looking and care for their employees offer bereavement leave.

Compensatory Off leave

Employees who have worked for more hours than they are required to is entitled to Compensatory Off leave. This happens when an employee has worked for more hours or has worked on a weekend of a holiday. Compensatory Off has to be automatically recorded in the system and the employees must be informed that they can avail an extra day of leave for the extra time they have put in. Compensatory Off has to be availed within an expiry period of 4 to 8 weeks, therefore, the employee has to utilize the compensatory off within period.

Loss of Pay or Leave without Pay

When an employee has availed all the leave that he or she is entitled to including the leave types like bereavement leave, marriage leave etc, and wishes to take leave, then he can take leave with a pay cut. This is known as Loss of Pay leave or Leave without Pay. Any leave availed over and above the leave entitlement as per the leave policy is considered as Loss of Pay leave.

An employee availing leave without prior intimation or not providing medical certificate for the sick leave availed would be treated as Loss of Pay leave. Loss of Pay leave has to be properly tracked so that the salary deduction can take place for the number of days of Loss of Pay during that month.

Conclusion

Proper maintenance of the leave and attendance of employees is of paramount importance in an organization. This operation is handled during the Payroll process and it is, therefore, imperative that the payroll process in maintained most efficiently and without any errors. Manual processing using Excel worksheet and processing with a customized software may be successful when the workforce is small, but where the workforce is large the ideal option is to outsource the process to an experienced service provider

GetifyHR ranks among the top leave management service providers in India. Our high-end, technology driven software is perfectly designed to address all aspects of leave management that include leave application, approval or rejection of leave, managing leave balances and leave analytics. All the leave types like casual leave, earned leave, sick leave, maternity leave, paternity leave, marriage leave, compensatory off leave, loss of pay leave etc can be efficiently handled with our module. This cloud-based package is easy to handle and will provide all the necessary reports at the click of a button. Leave management has never been an easy task but with GetifyHR by your side this complex task gets overly simplified.

The Factories Act, 1948

A Brief History

This was the time when the British were ruling India, the latter half of the nineteenth century heralded the growth of large-scale industry in the country and there was a need to regulate the working conditions in factories. This need was fulfilled by the provisions of a legislation to regulate the working conditions in factories through the first Factories Act that was enacted in 1881.

The Act regulates the working conditions of the workers, especially concerning the health, safety, working conditions, and hazardous processes in factories. Amendments to the Act followed in the years 1891, 1911, 1922, and 1934 during the British era and once India gained Independence in the year 1947, the Indian Government passed the Factories Act, 1948. This Act extends to the whole of India, and includes Jammu and Kashmir. The Act came into force on 1st April 1949 and amendments came out in the years 1976 and 1987.

Objectives of the Act

The main objective of the Factories Act, 1948 are to regulate the working conditions in factories and it lays down several provisions to protect the health, safety and welfare of workers, and makes provisions to handle hazardous processes in the workplace. The Factories Act, 1948 is more comprehensive than all the previously enacted Factories Acts, and lays down the conditions for the employment of young persons, women and children and also focuses on annual leave entitlements of the workers.

The health of the Workers

The health of the worker finds a prominent mention in the Act. The provisions of the Act require every factory coming under the purview of the Act to protect the health of the workers. The Act lays down that every factory shall keep the premises clean, with provisions for disposal of waste and effluents, proper ventilation and maintenance of temperature, and prevention of dust fumes. The premises should not be overcrowded and should have proper lighting.

There should be provisions for adequate drinking water along with provisions for clean and hygienic latrines and urinals. Sufficient spittoons have to be placed in convenient places and they have to be maintained in a clean and hygienic condition.

Safety

The safety of the workers is paramount in a workplace. The Act lays down provisions for the safety of the workers and they include proper fencing of the machinery. Only skilled workers should handle the dangerous mechanical devices, with assurance of proper maintenance. Young people should not operate such machines. For the worker to escape in the event of an emergency, proper manholes have to be provided.

Working Hours

The Act sets forth provisions to control the working hours of the workers. Adult workers are not allowed to work in a factory for more than 48 hours in any week. Provisions for weekly holidays, for compensatory holidays and proper intervals for rest are a must. The maximum number of hours that an adult worker is required to work is 9 hours in a day. Provisions regarding night shifts, overlapping of shifts, and extra wages for overtime are also provided through this Act.

Welfare Measures

Welfare measures include the facilities provided to workers inside or outside the factory premises. These include provisions for a well-maintained canteen, rest and recreation facilities, housing, and all other services that contribute to the welfare of the workers. Where there are many women workers, crèche facilities have to be provided to take care of their children, especially those below the age of 6 years.

Applicability of the Act

The Factories Act applies to any factory wherein 10 or more workers are employed or were employed on any day of the preceding 12 months, and in any part of which a manufacturing process is being carried out with the aid of power. The Act is also applicable to any factory where 20 or more employees are working or were working on any day of the preceding 12 months, and in any part of which a manufacturing process is being carried out without the aid of power.

A mine or a mobile unit belonging to the Armed forces of the country, a railway running room, or a hotel, restaurant, or eatery is not included in this. All the workers in different groups and relays in a day shall be taken into account when compiling the number of workers in the unit.

Important Definitions

1. The Occupier

The ‘Occupier’ of an organization denotes the person who has ultimate control over the affairs of the factory. Depending on the type of organization, different designations may be given to the occupier.
1.1 If it is a firm or other association of individuals any one of the individual partners or members thereof shall be deemed to be the occupier.
1.2 In the case of a company, any one of the Directors shall be deemed to be the occupier.
1.3 In the case of a factory owned or controlled by the Central Government or any State Government or any local authority, then the person or persons appointed to manage the affairs of the factory shall be deemed to be the occupier.

2. The Worker

The worker means a person who is employed directly or through any agency (including a contractor) with or without the knowledge of the principal employer, whether for remuneration or not in any manufacturing process, or in any other kind of work incidental to or connected with the manufacturing process, or in cleaning any part of the machinery or premises used for the manufacturing process, or in any other kind of work incidental to or connected with the process of manufacturing. Any member of the armed forces of the country is not included in this.

3. What is the Manufacturing Process?

Manufacturing Process concerns any process for making, altering, ornamenting, finishing, packing, oiling, washing, cleaning, breaking, or otherwise treating or adopting any article or substance with the view to its use, sale, transport, delivery of disposal or pumping oil, water, sewage or any other substance, or in generating, transforming of transmitting power or composing types for printing, printing for letterpress, lithography, photogravure or other similar process or book-binding or processing or storing any article in cold storage.

4. Annual Leave with wages

The Act has provisions regarding the entitlement of Annual Leave with wages to each worker. Every worker who has worked for a period of 240 days or more in a factory during the calendar year shall be entitled to leave with wages for several days in the subsequent year. An adult worker is entitled to one day’s leave for every twenty days worked during the previous calendar year. For a child worker, the entitlement is one day for every fifteen days worked during the previous calendar year.

5. Provisions regarding Hazardous process

According to the Act, “hazardous process” refers to any process or activity concerning an industry specified in the ‘First Schedule’ where unless special care is taken, raw materials used therein or the intermediate or finished products, by-products, wastes, or effluent thereof that would cause impairment of the health of the persons engaged in or connected therewith or result in pollution of the general environment.

The Occupier or Manager of every factory involving a hazardous process shall disclose in the manner prescribed by the Act, all information regarding dangers, including health hazards and the measures taken to overcome and minimize such hazards arising from the exposure to or handling of the hazardous materials or substances in the manufacture, transportation, storage, and other processes, to the workers employed in the factory, to the local authority under whose jurisdiction the factory is situated, and the general public in the vicinity.

6. Penalties under the Factories Act, 1948

Contravention of any of the provisions of the Act or any of the rules thereunder or any order given in writing thereunder will have serious consequences. The occupier and manager of the factory shall be held guilty of the offense and punishment include imprisonment for a term that may extend up to 2 years or with a fine that could extend to one lakh rupees or with both. In case the contravention continues after conviction, a further fine of one thousand rupees for each day on which the contravention is so continued is imposed.

In case the contravention of any provisions or any rules results in an accident causing death or serious bodily injury the fine shall not be less than twenty-five thousand rupees in case of death and five thousand rupees in case of an accident causing serious bodily injury.

Conclusion

The Factories Act, 1948 with its amendments in 1976 and 1987 has been in operation for well over 70 years and has provided tremendous service to the factory workers in the country. The Act has considerably improved the working conditions in factories and has effectively killed the exploitation of workers, and provided them with enough teeth to bargain with employers for better working conditions.

The workers are the backbone of the industrial sector and their safety and welfare are critical for industrial growth. Employers have to be fully aware of their legal obligations concerning the Factories Act and GetifyHR, with its years of experience in handling these issues is the ideal choice to assist factories in this vital task. Their cloud-based Payroll Outsourcing module is the perfect choice to not only handle payroll but also handle all Statutory Compliance issues. Complying with the Factories Act, 1948 and the later amendments is vital for all factories, and an associating with GetifyHR will help you to achieve this.

Types of Trainees and Labour Laws related to Trainees in India

A trainee is a person undergoing a training program within an organization, after graduation from the higher and technical course. These trainees may be subsequently absorbed into the organization on completion of the training program.

In India, there are no specific laws that determine or include the word ‘trainees’. We can identify three types of people who undergo training. They are Trainees, Interns, and Apprentices.

Trainees

As mentioned earlier, trainees are those individuals, usually, freshers, who lack specific skills and who undertake the specified training as ‘trainees’. Upon completion of training, they may be absorbed into the organization if found fit. Stipend is paid during the period of training.

Interns

Interns are students who are undergoing their education but due to the requirement of the curriculum, undertake an internship program in an organization. An internship is a temporary position that is mandated in the course that they are undergoing. In most cases, interns do not receive any wages during the period of internship. There are, however, exemptions where interns are paid during their internship. However, paid internship is an exception.

Apprentices

An apprentice is a person who trains for a career by working under the supervision of a highly experienced individual or worker. The apprentices have a formal contract with the employer. The apprenticeship follows a clear plan and includes on-the-job training combined with an educational curriculum. The individual comes under the Apprentice Act, 1961. Apprentices are paid stipends ranging from Rs:9,000/- to a high of nearly Rs:21,000/-.

Labour Laws related to Trainees

In India, there are no specific labour laws that include trainees. A lot of confusion persists regarding whether they are eligible to receive the benefits that normal employees get. There are instances where trainees are looked upon as employees, and organizations that engage trainees should be aware of certain facts before engaging them.

Are trainees eligible for EPF?

A trainee is eligible to get the benefit of the EPF Act under certain circumstances. If the trainee is not a student and does not come under the Apprentices Act, 1961, then the trainee will be eligible for EPF deductions. This is subject to the trainee attracting Sec.2(b) and Sec.2(e) of the EPF Act.

Section 2(b)

Section 2(e)

Are trainees eligible for ESIC?

Trainees are generally paid a stipend. If the trainee satisfies Sec.2(9) of the ESIC Act, then he is considered an employee and is eligible to be subjected to ESIC contributions.

Section 2(9)

Are trainees subject to the Minimum Wages Act, 1948?

Trainees, especially in the private sector have to be paid the notified Minimum wages. The Minimum Wages Act contains a listing of the scheduled employment. As per the Act, temporary or probationers under scheduled employment must receive a minimum rate of wages as notified.
The Ministry of Labour and Employment, through its Notification G.S.R 680 (e) dated 22nd September 2014 notified the minimum wages to be paid to trade apprentices.

This minimum rate is calculated as a percentage of the salary of semi-skilled workers of the respective State or Union Territory. The percentages are as follows:

70% during the first year of training.
80% during the second year of training.
90% during the third and fourth year of training.

In the event of a State or Union Territory not notifying the minimum wages then the lowest minimum wages of the scheduled employment for semi-skilled workers shall be considered for calculating the stipend.

G.S.R 680 (e)

Are Trainees eligible for Bonus?

Where the trainees are engaged under the Apprentices Act, 1961, they will not be entitled to a Bonus under Sec. 2(13) of the Payment of Bonus Act, 1965. The Apprentice is not considered an ’employee’ and is, therefore, not eligible to receive a Bonus.

If the trainee has not been engaged under the Apprentice Act, 1961, then the trainee is eligible for a Bonus under the Payment of Bonus Act, 1965 subject to satisfying Sec.8 of the Act.

section 2(13)

section 8

Are Trainees eligible for Maternity benefits?

A trainee with one surviving child, engaged as an Apprentice under the Apprentices Act, 1961, may be granted maternity leave for 90 days from the date of its commencement without payment of the stipend, and the apprenticeship training period shall be extended accordingly.

The apprentice is eligible to receive the stipend during the extended period.

A woman trainee can also avail of the benefit under the Maternity Benefit Act, provided she satisfies Sec. 3(o) and Sec. 5(2) of the Act.

Section 3(o)

Section 5(2)

Conclusion

From the available information, we can understand that

Trainees shall be considered for entitlement of EPF and ESI subject to them not being apprentices under the Apprentices Act, 1961.
Apprentices engaged under the Apprentices Act, 1961 are not treated as ’employees’ under the ESIC Act, whereas a trainee can be treated as an ’employee’.
Interns who are paid needn’t be considered for EPF and ESI, whereas unpaid interns have nothing to be deducted from as they do not receive any remuneration.
Trainee women apprentices engaged under the Apprentice Act, 1961 who have one surviving child may be granted 90 days leave under the Maternity Benefit Act, 1961.
Apprentices engaged under the Apprentices Act, 1961, or as per the Model Standing Orders, needn’t be considered for EPF.
Trade Apprentices are eligible for Minimum Wages.
Trainees in the scheduled employment as per the schedule of the Minimum Wages Act must receive a minimum of the notified rate.

GetifyHR has gained tremendous experience in handling these issues. Our Payroll Outsourcing Module is perfectly designed to handle all aspects of Payroll processing like generation of Payslips, Leave and Attendance, and Statutory requirements like EPF, ESI, PT, and TDS. Ours is a one-stop solution for all Payroll related issues.