EPFO wage ceiling hike to expand social security net, strengthen retirement protection: Industry
New Delhi, Sep 17
The government's decision to raise the monthly wage ceiling for mandatory coverage under the Employees' Provident Fund Organisation from Rs 15,000 to Rs 25,000 has been welcomed by industry and labour representatives, who said the move would widen the social security net, support formal employment and strengthen long-term financial protection for workers.
FICCI Director General Jyoti Vij said the revision had been overdue, pointing out that the previous wage ceiling was set in 2014, while wage levels, incomes and the structure of employment have changed significantly since then.
Speaking to IANS, Vij said the increase to Rs 25,000 was in line with changing economic conditions and would bring around 51 lakh additional employees under the formal social security framework.
She said the move could contribute to the formalisation of employment while helping companies retain employees and strengthening retirement security.
Vij noted that access to provident fund, pension and other social security benefits can improve employee morale and job stability, creating benefits for both workers and employers.
"When employees have confidence that they will have financial security after retirement, they are likely to remain more committed to their work and stay longer with an organisation," Vij said.
The decision was also welcomed by the Bharatiya Mazdoor Sangh (BMS). Girish Chandra Arya, All India Secretary of the organisation and in-charge of the banking sector, said trade unions had been demanding an increase in the EPFO wage ceiling for a long time.
Arya said the Rs 15,000 threshold fixed in September 2014 had become inadequate considering the current economic environment and changing wage structures. He described the revision after nearly 12 years as an important step for employees.
He said the impact of the decision could extend beyond the immediate beneficiaries, as the government's efforts to promote formal employment and bring workers from the unorganised sector into the organised workforce could bring more employees under schemes such as EPF, ESI and bonus benefits in the future.
Arya also emphasised that the move should not be viewed merely as an increase in provident fund coverage. According to him, broader EPFO coverage would also strengthen workers' access to long-term pension and insurance protection.
— IANS
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