New Delhi: Retirement fund body EPFO is likely to approve a proposal to hike wage ceiling for coverage under its social security schemes to Rs 25,000 per month from the existing Rs 15,000 on 19 December.
The move can bring in 50 lakh more formal sector workers into the social security net of the Employees' Provident Fund Organisation (EPFO) in addition to its existing subscriber base of around 4 crore organised sector workers.
The apex decision making body of the EPFO -- the Central Board of Trustees (CBT), headed by the Labour Minister -- is scheduled to meet on Monday (December 19).
"The CBT is likely to discuss and approve the proposal to increase the monthly wage ceiling to 25,000 for coverage under social security schemes for providing provident fund, group insurance and pension in the its trustees' meet at Bengaluru on 19 December, 2016," a source said.
The source added that back of the envelop calculations suggest that 50 lakh additional formal sector workers would be covered after the ceiling is hiked to Rs 25,000 per month.
The source also said that the wage ceiling hike is imminent because Employees State Insurance Corp (ESIC) which provides health insurance to formal sector workers has already increased the monthly wage ceiling to Rs 21,000 from Rs 15,000 from 1 October, 2016.
The EPFO and ESIC run social security schemes for formal sector workers and are under administrative control of the Labour Ministry.
Earlier this month, Labour Minister Bandaru Dattatreya had told the Lok Sabha, "A proposal for increase in the wage ceiling from Rs 15,000 per month to Rs 25,000 per month for coverage under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 has been submitted by the Employees' Provident Fund Organisation (EPFO). No decision in this regard has been taken."
EPFO had increased the wage ceiling to Rs 15,000 per month from Rs 6,500 on 1 September, 2014 in view of price rise and pay revisions in the formal sector.
Besides the wage ceiling, the issue of exempting textile sector from meeting mandatory EPFO norms could come up for discussion.
On 7 December, the Union Cabinet had given its approval to reforms to boost employment generation and exports in the made-ups sector (part of the textile sector).
The Union Cabinet made it optional for employees earning less than Rs 15,000 per month to contribute towards EPFO schemes.
At present, employees are required to contribute 12 percent of their basic wages towards social security schemes run by the EPFO.
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Updated Date: Dec 13, 2016 12:06:32 IST