Daijiworld Media Network - New Delhi
New Delhi, Sep 16: The Union Cabinet has approved an increase in the wage ceiling for mandatory coverage under the Employees' Provident Fund Organisation (EPFO) from Rs 15,000 to Rs 25,000 per month, Union Information and Broadcasting Minister Ashwini Vaishnaw announced on Wednesday.
The decision is expected to bring more than 51 lakh additional employees under mandatory EPFO coverage, expanding access to provident fund, pension and insurance-related social security benefits.
The wage ceiling had remained unchanged at Rs 15,000 since September 2014. The latest revision will bring employees earning between Rs 15,000 and Rs 25,000 a month within the mandatory coverage framework, subject to the applicable EPFO rules.
According to the government, the move is aimed at widening social security coverage and strengthening the formalisation of employment by bringing more workers into the EPFO system. The EPFO administers provident fund, pension and insurance-related social security schemes for eligible workers.
The expanded coverage is expected to increase the government's annual expenditure to around Rs 11,339 crore. The government currently provides financial support towards the pension component under the Employees' Pension Scheme.
The revision also comes amid efforts to align statutory social security coverage with changes in wage levels and the expansion of formal employment. The government said the decision represents a step towards strengthening retirement security and expanding the social security net.
The EPFO currently has nearly 8 crore contributing members, according to reports, while the latest decision is expected to add more than 51 lakh employees to the mandatory coverage framework.
The increase in the ceiling marks the first revision since 2014 and is expected to extend statutory provident fund and pension coverage to a larger section of salaried workers.
The government said the measure will strengthen formalisation and advance its broader social security objectives.