EPFO clarification on NEEM trainees

The Employees’ Provident Fund Organization (“EPFO“) issued clarification on February 24, 2022, whether the National Employability Enhancement Mission (“NEEM“) trainees are exempted from the applicability of Employees Provident Funds &Miscellaneous Provisions Act, 1952 (“EPF Act“) in the light of Regulation 15.2 of the All India Council for Technical Education (NEEM) Regulations, 2017 [“NEEM Regulations“]. By way of the said clarification, it was clarified that: (a) the NEEM trainees are not exempted from the definition of “employee” under section 2(f) of the EPF Actand the Regulation 15.2 of the NEEM Regulations is ultra vires to the provisions of the EPF Act, however certain criteria have been laid down in EPFO circular dated October 12, 2015 to distinguish a student-trainee from an employee engaged by an establishment covered under the EPF  Act read with EPF Scheme, 1952 (“EPF Scheme“), after ascertaining the facts and circumstances of each case on merit; (b) a mechanism under Para 26B of the EPF Scheme has already been provided whereby a Regional Provident Fund Commissioner (RPFC) has been vested with power to decide a question whether an employee is entitled to, or required to become a member of the EPF Scheme, after ascertaining the facts and circumstances of each case on merit and (c) cases of subterfuge shall be distinguished from genuine arrangements for training. Hence, any question whether a person is a trainee or employee may be decided as per law and considering the circular dated October 12, 2015.