Coronavirus Lockdown: Govt implements cut in employees' provident fund contribution to 10% for May, Jun, July

The Ministry of Labour & Employment has implemented the decision to cut employees' provident fund (EPF) contributions to 10 per cent from the existing 12 per cent for three months till July

Press Trust of India May 19, 2020 12:08:46 IST
Coronavirus Lockdown: Govt implements cut in employees' provident fund contribution to 10% for May, Jun, July

New Delhi: The Ministry of Labour & Employment has implemented the decision to cut employees' provident fund (EPF) contributions to 10 per cent from the existing 12 per cent for three months till July.

This would increase 4.3 crore organised sector employees' take-home pay and reduce the liability of 6.5 lakh employees reeling under liquidity crunch under lockdown to contain COVID-19.

The decision is estimated to infuse liquidity of Rs 6,750 crore in the next three months.

Coronavirus Lockdown Govt implements cut in employees provident fund contribution to 10 for May Jun July

Representational image. PTI

The labour ministry in a notification issued on Monday stated that the reduction in EPF contributions shall be applicable "in respect of wages payable by it for the months of May, June and July, 2020".

Click here to follow LIVE updates on coronavirus outbreak

Therefore the take home pay due in June, July and August would increase, while the employers' contributions due in June, July and August would reduce.

Giving reason for the move it stated: "whereas due to COVID-19 pandemic, lockdown is in force across the country and the Central Government after making the necessary inquiry is satisfied that to provide liquidity in the hands of employers and employees, there arises a need to amend the notification of 9 April, 1997."

Click here to follow LIVE news and updates on stock markets

Last week, Finance minister Nirmala Sitharaman had announced a reduction of statutory provident fund contribution by both employers and employees for next three months.

The Central Public Sector Enterprises (CPSEs) and public sector undertakings (PSUs) will, however, continue to contribute 12 percent as an employer contribution to the Employees' Provident Fund Organisation (EPFO).

This reduction of the EPF contributions will be applicable for workers who are not eligible for 24 percent EPF support under PM Garib Kalyan Package and its extension.

The government is contributing employers and employees contributions of 24 percent of basic wages for those establishments that have up to 100 employees and 90 percent of whom earn under Rs 15,000 monthly wage since March.

Last week, Sitharaman had also announced the extension of the benefit under Pradhan Mantri Garib Kalyan Yojana (PMGKY) for three months, where the government would contribute entire 24 percent of EPF contributions till August, giving relief to 3.67 lakh employers and 72.22 lakh employees.

Updated Date:

also read

India records 11,793 new COVID-19 infections, 27 deaths in last 24 hours; active case count rises to 96,700
India

India records 11,793 new COVID-19 infections, 27 deaths in last 24 hours; active case count rises to 96,700

According to health ministry, 9,486 patients recuperated from coronavirus in the last 24 hours, increasing the total recoveries to 4,27,97,092. The national recovery rate currently stands at 98.57 per cent

India reports 13,313 new COVID-19 cases, 38 deaths in last 24 hours
India

India reports 13,313 new COVID-19 cases, 38 deaths in last 24 hours

India now has 83,990 active infections of COVID-19. There has been increase of 2,303 cases in just 24 hours and the active caseload now stands at 0.19 per cent of total cases

China places 1.7 million people in lockdown in Anhui province
World

China places 1.7 million people in lockdown in Anhui province

The outbreak in Anhui comes as the Chinese economy begins to rebound from a months-long lockdown in Shanghai and disruptive COVID-19 restrictions in the capital Beijing