EPFO : Millions of employed people across the country have been waiting for some good news for a long time. Demands have been rising to raise the mandatory wage ceiling for the Employees’ Provident Fund (EPF). This issue resonated loudly on the very first day of Parliament’s winter session. The question on everyone’s mind was: Is the government really going to increase the PF limit from Rs 15,000 to Rs 30,000? The answer given by Union Labor and Employment Minister Mansukh Mandaviya to this question is crucial for every employee to know.
What did the Union Minister say?
During the Parliament session, MPs Benny Behanan and Dean Kuriakose directly asked the government whether the central government plans to increase the EPF salary limit from Rs 15,000 to Rs 30,000. Responding to this, Labor Minister Mansukh Mandaviya clarified the situation. He said that extensive consultation is required before making any changes to the salary limit. The minister told Parliament that the decision to increase the salary limit for coverage under the EPFO is taken only after extensive discussions with all stakeholders.
These stakeholders include both employee unions and industry associations. The government argues that this decision cannot be taken unilaterally because it has two major economic implications. First, if the limit is increased, employees’ take-home salaries may decrease because a higher PF contribution will be deducted. Second, employers will also face an increased burden on hiring costs. Therefore, the government is neither saying yes nor completely denying this, but is calling it a topic for discussion.
When was the last time your PF limit was changed?
Currently, contributions to EPF are mandatory for employees with a basic salary of up to Rs 15,000. If someone’s basic salary is higher than this and they joined the job after September 1, 2014, this contribution is optional. The last change to the EPF salary limit was made in 2014, when the central government raised it from Rs 6,500 to Rs 15,000 per month.
What is the plan for gig workers?
These days, the number of people working in the gig economy, i.e., through online platforms (such as delivery and cab services), has grown rapidly. Will they also be eligible for EPF benefits? The government has clarified this in Parliament. The government has clarified that gig workers will not be covered under the current EPF Scheme, 1952. The reason behind this is that gig workers and platforms do not have the traditional employer-employee relationship on which the entire PF framework rests.
The Labor Minister stated that under the Code on Social Security, 2020, a gig worker is defined as someone who earns money outside of traditional employment relationships. However, this does not mean they will not receive protection. The Minister explained that the Code on Social Security, 2020, provides provisions for life and disability coverage, accident insurance, health benefits, and old-age security for gig workers and platform workers. A separate Social Security Fund has also been proposed for this purpose.