New Delhi, Sep 16: The Union Cabinet has raised the wage ceiling for mandatory coverage under the Employees’ Provident Fund Organisation (EPFO) from Rs 15,000 to Rs 25,000 per month.
Union Information and Broadcasting Minister Ashwini Vaishnaw said the move is expected to bring more than 51 lakh additional employees under mandatory EPFO coverage. The government’s annual expenditure on the measure is estimated at Rs 11,339 crore.
Employees earning between Rs 15,000 and Rs 25,000 per month will now come under the revised EPFO coverage rules, expanding access to provident fund and pension-related social security benefits.
Vaishnaw said the wage ceiling had remained unchanged between 2004 and 2014, before being raised to Rs 15,000 in September 2014. The latest increase, he said, takes into account rising wages, incomes and the growth of formal employment.
The government said the average monthly income of salaried employees has risen to around Rs 23,000, while the cost of living and minimum wages have also increased over the past 12 years.
Under the earlier ceiling, a new employee earning Rs 16,000 a month could remain outside mandatory EPF coverage if the applicable wage exceeded the Rs 15,000 limit. With the new Rs 25,000 ceiling, an employee earning Rs 16,000 will fall within the mandatory coverage bracket.
The EPFO currently has around 7.98 crore members and 7.68 lakh establishments, according to the government.
