Centre govt. likely to raise EPFO wage ceiling to 21000
This will increase both employees' and employers' epfo mandatory contributions, allowing workers to save more money for retirement. The increase will also bring more workers under EPFO's social security coverage.
HIGHLIGHTS:
- An Expert committee to determine wage ceiling
- It would be indexed to inflation with periodic review
- EPFO ceiling will go up to Rs. 21000 from Rs. 14000
- It will enhance PF kitty and EPFO coverage
- Employer resisted for increasing wage and compliance cost.
The government is likely to soon revise the Employee Provident Fund Organization (EPFO) contribution coverage ceiling from Rs. 15000 to Rs. 21000 under the flagship retirement scheme. This will increase both, employees’ and employers’ epfo mandatory contributions, allowing workers to save more money for their retirement. The increase will also bring more workers under EPFO’s social security coverage.
Currently, the wage ceiling for EPFO’s employee provident fund scheme is Rs. 15000 per month, which was revised in 2014 from Rs. 6500 per month. The scheme is available only to establishments that have more than 20 workers.
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An expert committee will be constituted to determine a higher wage ceiling, which will be indexed to inflation and reviewed periodically for coverage under EPFO, as reported to news agencies.
The purpose of this proposal is to align the EPFO and Employee State Insurance Corporation wage ceilings, the social security schemes run by the labour ministry. This will bring parity under these social security schemes of the central government and ease the compliance burden on the establishments, as reported.
Another reason for raising the wage ceiling is to make insurance mandatory for workers in the organized sector earning less than Rs. 15,000.
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