Labour appointment as Trainee - Rs. 7500 /- is much below the min wages for unskilled

I want to appoint a few ITI pass-outs. But my concern is, as directed by my seniors, all such candidates will be called as "Trainee". Now we will pay Rs 7500/- as a monthly fixed amount, without PF or ESIC deduction. Rs. 7500/- is much below the minimum wage for unskilled labor. Is this legally acceptable? If not, which Act, Rule, section is being contradicted? Please help me with the data so that I can convince my seniors to raise their pay to at least the minimum wage. Thanks

Dear Sandeep,

The prospective 'trainees' are already holders of ITI trade certificates. It is proof that they have already undergone apprenticeship training under the Apprentices Act. The absence of essential information pertaining to the length of the training, the consequential employment opportunity in your organization as regular employees, and the provision for engagement of trainees in your standing orders, coupled with the specific orders of your management to appoint them with the designation as trainees below the statutory minimum wages, indicates to me that it is only a tactical arrangement to circumvent the concerned labor laws. If institutional training is absolutely required, the nature of the job should be so critical to retrain and orient the already skilled persons for a definite period involving extra efforts and cost. Even in such a situation, the appointment can be regular with a stipulation for certain compulsory minimum post-training service or refund of the entire cost of training. Therefore, concerning the specific details described above, my opinion is that your management cannot escape compliance with the provisions of the laws relating to Minimum Wages, ESI, and EPF.

Thank you, Mr. Umakanthan. That is exactly what I am feeling is going wrong.

1. The organization does not have a standing order.
2. The organization is planning to take them as trainees at Rs. 7500 (not under apprenticeship) for six months, make them work, and understand if they can work, and then decide. No PF or ESIC. May extend to one year.
3. They will be working as other workers. This is just to save some money.

Should I allow the management to do so? Please help.

You may appoint fresh ITI candidates as Apprentice Trainees under the provisions of the Apprenticeship Act. Even graduates and Diploma Engineers under BOPT (Board of Practical Training). You have to pay a consolidated amount per month as prescribed under the act without PF and ESI, and you have to grant leave as per eligibility.

However, it is suggested that you arrange to obtain an "Accident" or "Mediclaim" insurance policy if those trainees are placed at a factory or any such place where an accident may happen at any time. Nobody will ask you to make provisions for such a worst situation, but if it does occur, nobody will help you to tide over the situation.

I have heard about NEEM, the National Employment Enhancement Mission of the government, under the AICTE. Employers can hire candidates as NEEM trainees, where they are paid a stipulated monthly stipend and covered under medical insurance. If anybody can explain NEEM in a better way, it would be helpful.

Please let me know if you need further clarification or assistance.