To widen the Workers’ Provident Fund (EPF) protection, the labour ministry is more likely to elevate the wage ceiling for necessary EPF profit to Rs 21,000 a month from Rs 15,000 now.
An announcement to this impact is predicted quickly.
The transfer is probably going to usher in an estimated 10 million extra employees underneath the social safety internet.
Presently, EPFO has round 65 million contributing members. The wage ceiling was final raised in 2014, for the ninth time for the reason that Workers’ Provident Funds Act was enacted in 1952. Although the necessary cowl is for workers incomes as much as Rs 15,000 a month, sections of the employers voluntarily prolong the profit to folks with larger salaries as nicely.
The wage ceiling underneath the opposite social safety scheme, Workers’ State Insurance coverage Company (ESIC), at the moment stands at Rs 21,000 a month, raised with impact from January 2017 from Rs 15,000 earlier.
Whereas ESIC is relevant to all non-seasonal factories, retailers, lodges, eating places and a bunch of different areas of labor having 10 or extra workers; EPF is relevant in factories and institutions which make use of 20 or extra employees. Others also can be part of the scheme voluntarily.
Commerce unions, together with RSS-affiliated Bharatiya Mazdoor Sangh (BMS), have been demanding the elevating the wage ceiling underneath EPFO to align it with the ESIC for lengthy. Binay Kumar Sinha, common secretary, BMS, stated that the EPF Act also needs to be made relevant to all institutions having 10 or extra folks. The brink also needs to be linked with inflation.
An individual coated underneath EPF will get advantages underneath three schemes — provident fund, pension and insurance coverage — run by the EPFO. Within the outlined contribution-based scheme, workers contribute 12% of their wages whereas their employers contribute 13% of the workers’ wage into the scheme. Of employers’ 13% contribution, 3.67% goes into the EPF account, 8.33% in EPS and 0.5% every in EDLI scheme and within the administrative account.