The Union Cabinet on Wednesday approved raising the wage ceiling for mandatory coverage under the Employees’ Provident Fund Organisation (EPFO) from Rs. 15,000 to Rs. 25,000 per month, a move that is expected to bring over 51 lakh additional workers under the social security system.
Information and Broadcasting Minister Ashwini Vaishnaw said the decision expands mandatory EPFO coverage and reflects changes in wage levels and the growth of formal employment.
The wage ceiling had not been revised since September 2014, when it was increased from Rs. 6,500/- to Rs. 15,000. This is the first revision in 12 years.
Under the new ceiling, employees earning between Rs. 15,000 and Rs. 25,000 a month who were previously outside mandatory coverage will be brought within the EPFO framework, subject to the applicable rules.
The government estimates it will involve an annual expenditure of about Rs.11,339 crore against the present annual budgetary support of about Rs. 10,250 crore
The revised coverage is expected to expand access to provident fund savings, pension and insurance benefits to eligible workers.
