EPFO Wage Ceiling: The minimum salary of employees coming under EPFO can be increased. The government is working on this. Also, the minimum limit of employees in companies coming under EPFO can be reduced. The minimum salary of employees can be increased from Rs 15 thousand per month to Rs 21 thousand.
EPFO Wage Ceiling: The central government may soon increase the salary limit under the Employees’ Provident Fund Organization (EPFO). Also, the limit of the number of employees can also be reduced. Its purpose is to increase and broaden the coverage to strengthen social security for employees. The current salary limit under EPFO is 15 thousand per month. It can be increased to Rs 21 thousand in line with the salary limit under the Employees’ State Insurance Corporation. That is, it can be increased by up to Rs 6 thousand. Apart from this, the mandatory employee limit in a company to join EPFO can be reduced from the current 20 to 10 to 15 employees.
Discussions going on in the ministry
People aware of the matter told Economic Times that the Ministry of Labour and Employment is currently discussing the matter with stakeholders. They said the government is keen to implement the Social Security Code.
The talks are taking place following strong recommendations from a steering committee formed to broaden and deepen social security measures for employees.
The last salary revision was done in the year 2014
A senior government official said that the minister is evaluating all the pending proposals. The government feels that the salary limit and limit revision under EPFO is pending for a long time.
The last salary limit revision was done in the year 2014, when it was increased from Rs 6500 to Rs 15 thousand. The higher salary limit of Rs 21 thousand will increase the PF. Along with this, the pension of the employees will also be higher.
But there is opposition here
Another person familiar with the proposal said that micro and small companies are opposing the reduction of the limit of 20 employees. This is because it may increase their compliance burden and cost.
How much is the contribution?
Under EPFO, both the employee and the company are required to contribute 12-12% to the EPF account. The entire 12% of the employee’s contribution goes to the PF account. Whereas 8.33% of the company’s contribution goes to the Employees’ Pension Scheme (EPS) and the remaining 3.67% goes to the PF account.
