By way of Circular dated February 24, 2022, the Employees Provident Fund Organisation (‘EPFO’) clarified that the trainees engaged by an establishment under the All India Council for Technical Education (National Employability Enhancement Mission) Regulations, 2017(‘NEEM Regulations’) are not excluded from the definition of ‘employee’ under Section 2(f) of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (‘EPF Act’). The Circular clarified that Regulation 15.2 of the NEEM Regulations, which inter alia states that the remuneration paid to NEEM trainees will not attract any statutory deductions, is ultra vires to the provisions of the EPF Act.

The Circular makes a reference to the earlier Circular, dated October 12, 2015, which states that payment of a stipend to a student-trainee who is on industrial on the job training will not attract the provisions of the EPF Act, but students getting a placement in companies and appointed as employees will be covered under the EPF Act even during the job training/induction/other trainings taken after becoming an employee.