Another big news is waiting for govt employees. The Modi government can double the monthly salary limit to Rs 30,000 a month. The government may soon increase the wage limit to compulsorily include workers under the Employees’ Provident Fund (EPF) and Employees’ State Insurance Corporation (ESIC) schemes. There are also plans to bring the wage ceiling under the Employees’ State Insurance Corporation at par with the EPF.
Both these issues were discussed in detail in a meeting of the Central Board of Trustees (CBT), the apex decision-making body of the Employees’ Provident Fund Organisation, on Saturday.
At present the salary limit for joining under EPFO is Rs 15,000 per month and Rs 21,000 under ESIC. Official sources told Business Standard that the limit for both the schemes is likely to be increased to Rs 30,000 per month.
Final decision may be taken in February meeting
The proposal to increase the wage ceiling was discussed in the meeting of the Central Board of Trustees (CBT) of the EPFO on Saturday. “Though the CBT is expected to take a final decision in its February meeting, majority of the members and the labour ministry are in favour of doubling the existing cap,” a source involved in the meeting said. “
The wage ceiling under EPF and ESI refers to the wage ceiling up to which the EPF and ESI contribution is mandatory under the Act. The amount of ’employee’s contribution’ towards EPF and ESI should be deducted from the salary of the employees by the employer and deposited in EPFO and ESIC. Employers will have to deposit an amount equal to the contribution.
What will be the benefit of this change?
As per the current rules, employees earning more than Rs 15,000 have the option to exit the EPF coverage. If this limit is increased by Rs 15,000, the number of contributors will increase.
At present, there are 7 crore active members under EPFO. The existing wage ceiling for EPFO has been set at Rs 15,000 per month, which was revised from Rs 6,500 in 2014. Under EPFO, both employees and employers contribute 12-12% to the EPF account for employees earning a monthly salary of Rs 15000 or less.
How much will be deposited in PF?
At present, the EPF contribution of an employee with a basic salary of Rs 15,000 comes to Rs 1,800 per month, but suppose, if this salary limit is revised to Rs 30,000, then this contribution will increase to Rs 3,600 per month on a mandatory basis.
