Govt raises EPFO wage ceiling to ₹25,000; 5.1 mn more workers to be covered

EPFO wage ceiling hike: The proposal is expected to bring more than 5.1 million additional employees under mandatory EPFO coverage

The proposal is expected to bring more than 5.1 million additional employees under mandatory EPFO coverage

The government on Wednesday approved a proposal by the Ministry of Labour and Employment to enhance the wage ceiling for mandatory coverage under the Employees’ Provident Fund Organisation (EPFO) from ₹15,000 to ₹25,000 per month.

The approval, given during a Union Cabinet meeting chaired by Prime Minister Narendra Modi today, will expand access to provident fund savings, pension protection under the Employees’ Pension Scheme (EPS) and insurance protection under the Employees’ Deposit Linked Insurance Scheme (EDLI), in accordance with the applicable scheme provisions.

The proposal is expected to bring more than 5.1 million additional employees under mandatory EPFO coverage, a Cabinet press note read.

Currently, employees joining a job at a wage above ₹15,000 per month are not automatically covered under the EPF framework. Raising the ceiling to ₹25,000 will bring a larger segment of employees earning between ₹15,000 and ₹25,000 a month within the statutory social security framework, according to a Cabinet press note.

It will also enable the statutory contribution and pensionable-wage framework to better reflect prevailing wage levels.