Trainees engaged by establishments under National Employability Enhancement Mission (NEEM) Regulations are not exempted from the definition of ’employee’ under the Employees Provident Fund and Miscellaneous Provisions Act – EPFO

The Employees’ Provident Fund Organisation (“EPFO”) has clarified that trainees engaged by establishments under the ‘All India Council for Technical Education [National Employability Enhancement Mission (NEEM)] Regulations, 2017’ will not be deemed exempted from the definition of ‘employee’ under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. It is further clarified that the coverage of trainees under the Employees’ Provident Funds and Miscellaneous Provisions Act will depend on the specific facts after ascertaining facts and circumstances of each case on merit.

Key Highlights:

1. Trainees Under National Employability Enhancement Mission (NEEM) are not exempted from the definition of “employee” under the Employees Provident Fund and Miscellaneous Provisions Act, 1952;

2. Student-trainee vis-à-vis employee:
• Employer employee relationship does not exist between the industry and student-trainee, who is on industrial on the job training as an integral component of a recognized course of an educational/technical institute recognized by the Central/State Government or any other authority constituted by the Central/State Government;

• The payment of stipend, if any, provided by the industry to student trainees do not attract the provisions of the Employee Provident Funds & Miscellaneous Provisions Act, 1952;

• The students getting placed in companies and as employees, Employee Provident Funds & Miscellaneous Provisions Act, 1952 will be applicable even during on the job training / induction / other trainings taken after becoming employee.

A copy of the Notification is attached herewith for ease of reference.

Source: Ministry of Labour and Employment, Govt. of India