The Ministry of Skill Development and Entrepreneurship, Government of India, issued an Office Memorandum dated 21 October 2026 clarifying PF and ESI applicability for apprentices.

Key Points:

• Apprentices engaged under the Apprentices Act, 1961, including NAPS and NATS, are not treated as employees for PF and ESI purposes.
• PF and ESI contributions are not required on the stipend paid during the apprenticeship period.
• This clarification applies only to apprentices engaged under the Apprentices Act. Trainees engaged outside this Act may be covered under applicable social security provisions.
• If an apprentice is subsequently appointed as a regular employee, PF and ESI provisions apply from the date of such employment.
• Employers must continue complying with apprenticeship requirements, including stipend payment and health, safety and welfare measures.