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News: The Union Cabinet has raised the EPFO mandatory coverage wage ceiling from Rs.15,000 to Rs.25,000 per month.
Key Highlights of Enhancement of EPFO Wage Ceiling
- Implementation: The Ministry of Labour & Employment and Employees’ Provident Fund Organization (EPFO) will undertake the necessary statutory and administrative steps for implementation.
- Changes made
- Higher Coverage: The revised ceiling will bring more than 51 lakh additional employees under mandatory EPFO coverage.
- Wage Band: Employees earning between ₹15,000 and ₹25,000 per month will come within the statutory social security framework.
- Social Security: The decision will expand access to provident fund savings, pension protection under EPS and insurance protection under EDLI.
- Ceiling Revision: The wage ceiling remained unchanged from 2004 to 2014 before being increased to ₹15,000 in September 2014.
- Reason for Revision: The increase reflects sustained wage growth, rising incomes and continued expansion of formal employment.
- Government Outgo: The annual Government outgo is estimated at about ₹11,339 crore, while expenditure over five years is approximately ₹56,696 crore.
- Expected Impact: The measure is expected to give further impetus to employment formalisation, worker retention and long-term retirement security.
