The proposal, once implemented, will bring an estimated 7.5 lakh additional workers under the purview of the scheme and will also adjust for the increase in wages as last revised in 2014.
“If this suggestion is accepted by the EPFO’s Central Board of Trustees, it will give relief to employers who are willing or unwilling to immediately bear any additional financial burden,” a senior government official said.
The employers in their advisory cited the burden on their balance sheets due to the outbreak of the pandemic and sought more time to implement the proposed increase.
This will also be a relief for the exchequer as the Center currently pays around Rs 6,750 crore every year towards the Employees’ Pension Scheme of EPFO. The government contributes 1.16 percent of the total basic salary of EPFO subscribers for this scheme.
Under the existing rules, any company with more than 20 employees must be registered with the EPFO and the EPF scheme is mandatory for all employees with an income of Rs 15,000.
Employees in excess of raising the limit to Rs 21,000 will be covered under the retirement plan. This will also align the limit with other social security scheme Employees State Insurance Corporation (ESIC) where the limit is Rs 21,000.
