EPF: What Union Minister said on possibility of salary limit increase and GIG workers

New Delhi: Crores of salaried people across the country have been waiting for good news for a long time. Demands have been rising continuously to increase the mandatory wage limit (Wage Ceiling) for the Employees' Provident Fund (EPF). This issue echoed loudly on the first day of the winter session of Parliament. The only question on everyone's mind was... Is the government really going to increase the PF limit from Rs 15,000 to Rs 30,000? The answer given by Union Labour and Employment Minister Mansukh Mandaviya to this question is very important for every employee to know.

During the Parliament session, MP Benny Behnan and Dean Kuriakos asked the government a direct question whether the central government is planning to increase the EPF salary limit from Rs 15,000 to Rs 30,000? Responding to this, Labour Minister Mansukh Mandaviya clarified the situation. He said that before making any changes in the wage limit, a comprehensive discussion is needed. The Minister told Parliament that the decision to increase the salary limit for coverage under EPFO is taken only after long discussions with all stakeholders (Stakeholders).

These stakeholders include both employee unions and industry associations. The government argues that this decision cannot be taken directly one-sided because it has two big economic aspects. First, if the limit is increased, the 'take-home salary' (handheld salary) of employees may decrease, because the share of PF will be deducted more. Second, the burden of hiring costs (Hiring Cost) on employers (Employers) will also increase. Therefore, the government is not saying 'yes' directly nor completely denying it, but calling it a matter of discussion.

Currently, employees whose basic pay (Basic Pay) is up to Rs 15,000, it is mandatory to contribute to the EPF. If someone's basic salary is more than this and he has entered the job after 1 September 2014, then this contribution is optional for him. The last change in the EPF salary limit was made in the year 2014. Then the central government increased it from Rs 6,500 to Rs 15,000 per month.

These days, the number of people working through the 'gig economy' i.e. online platforms (like delivery and cab services) has increased rapidly. Will they also get the benefit of EPF? On this too, the government has cleared the picture in Parliament. The government has clarified that gig workers will not be included under the present EPF Scheme, 1952. The reason behind this is that gig workers and platforms do not have the traditional 'owner and employee' (Employer-Employee) relationship on which the entire PF structure rests.

The Labour Minister said that under the Social Security Code, 2020 (Code on Social Security), a gig worker is a person who earns money outside traditional employment relationships. However, this does not mean that they will not get protection. The Minister said that under the Social Security Code, 2020, provisions such as life and disability cover, accident insurance, health benefits and old age protection have been made for gig workers and platform workers. It has also been said to create a separate 'Social Security Fund' for this purpose.