Regarding Salary In Probation Period

1. During Probation period can Employer deduct PF,ESI and Tax from Employee?
2. Scenario 1: The Employer has provided the complete salary structure to the Employee. This includes PF deduction and they also deduct Tax. But the Employee is in probation period. The company has a policy that they do not enroll the employee on PF till the Employee completes his probation.
In this situation should the Employer pay the Employee the Employee’s part of PF and the Company’s part of PF as his salary without any tax deduction?
Kindly help me.
Regards,
Getsie Jesse

Dear Jestsie,
PF,ESI and Tax are applicable to employees from the date of joining. During probation period employee are considered as employee but not as permanent employee. Employer and employee had enter into a contract that is employment contract.
Hope this will help you.
Regard's
Shaikh

Dear Getsie Jesse
Any one who joins the company even if he is on probation
PF (from day one)
ESI (from day one, if gross salary is less than Rs.15000/ if the unit is covered under ESI as per ESI act)
Income tax, Professional tax etc. as applicable
has to be deducted.
Members PF deduction along with management contribution has to be paid to the PF organisation.
If company does NOT do this, it is an offence.
Being a HR person, you please highlight this to your management.
V. Selvaraj
Senior Executive (HR)

Thank You All for the response.

So far I was putting all employees under PF right from the day one. Since I heard that there was a practice in few companies that they do not pay PF and do not deduct tax till the probation of the employee is complete. I wanted to confirm whether the practice was a fair practice.

Once again thank you all for the clarification.

Regards,

Getsie Jesse

My Dear Friend,
First of all immediately correct your Company Policy and strat dedcution of PF immediatley. secondly calculate arrears of all employees on roll and those who left the services which were on probation and your company has not deducted.
You are doing offence and now time to regularies it.
PF authorities shall file suit agaisnt your company.
As curiosity, let me know the name of person/ consultant who suggested wrong things to your company.
IT and other Acts also attracted.
Best Luck
Sanjeev

Hi,

This incident has not happened in my company. I got this information from my friend and I had told them it was a wrong practice. Then I wanted to have a clear cut idea about the above and I wanted to know if there was any exceptional case that’s why I posted this question on discussion. The person who gave me the information was an employee and not HR. Hence I have no further information.

It’s very kind of you to provide me with all details.

Regards,

Getsie Jesse

Hai,
This is to get clarifed a point on ESI deduction referred in the answer
If HO of the company is in Chennai and it has got many centers all over India and it deducts PF and does not deduct ESI amount from any of the employee below rs.15000.00 ( under probation). In the begining deducted the amount and later ( after four Months) gave back the deducted amount with the salary.
In this case - is it legal ? ESI Registered unit means - based on the No of people working in each center ? or employees in the company all over the centrs- please?
Regards
rari

dear jesse, ESI and PF and other statutory deduction will be effective from the date of joining. where it's probation or temporary.

If salary is more than 15000 then only tax is applicable(PF is not applicable if,salary more than 6500/month and ESi is no applible if salary more than 15000 per month).
All above benefits to be provided to your employee from day 1,either on probation.permanent or other employement.

Yes my learned professionals have give the right advice, PF and ESI deduction has to be deducted from the day the employee joins the company otherwise it would be a legal non compliance and can be prosecuted for the violating the provisions of the the Law. You have not mentioned whre your establishment exists, thus I would like you check up whether your establishment within the notified area for the purposed of applicability of the Act. Incase is not in the notified area then the provisions of ESI will not be applicable to you.
Regardds,
Ashok K. Ghose