A high-level committee has backed a proposed increase in wage ceiling under the Employees’ Provident Fund Organisation (EPFO) to ₹21,000 a month from the current ₹15,000, reported The Economic Times.
The committee has said the government can implement the increase from a later date considering all inputs.
The proposal, once implemented, will bring an estimated 7. 5 million additional workers within the fold of the scheme, and also adjust for the increase in wages as the last revision was done in 2014.
“The ad-hoc committee on EPFO coverage has agreed to enhance (waged under) EPF Act to align with ESI establishment,” a senior government official said, adding that it has suggested the implementation to be considered at a later stage and not immediately
The suggestion, if accepted by the central board of the trustees of EPFO, will give a breather to the employers who are reluctant to immediately take on any additional financial burden, wrote the Economic Times.
Employers had in their consultations cited stress on their balance sheets due to the outbreak of the pandemic and sought more time for implementing the proposed increase.
It will also be a relief for the exchequer as the Centre currently pays about ₹6,750 crore every year to the Employees’ Pension Scheme of the EPFO. The government contributes 1.16% of the total basic wage of EPFO subscribers towards the scheme.
Under the current rules, any company with more than 20 employees must register with the EPFO and the EPF scheme is compulsory for all employees earning less than ₹15,000.
The increase in the limit to ₹21,000 will bring more workers under the retirement scheme. It will also align the ceiling with the other social security scheme Employees’ State Insurance Corporation (ESIC) where the limit is 21,000.