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Over 1.5 lakh companies resume contributions to EPFO after pausing in February: Report

The number of companies and establishments contributing to EPFO dropped to 3,32,773 in April.

August 20, 2020 / 04:03 PM IST

At least 1,53,500 establishments have again started contributing to the Employees Provident Fund Organisation (EPFO) after pausing payments, indicating a recovery after the coronavirus lockdown. However, around 64,000 entities are yet to restart contributions.

At least 5,49,037 firms were contributing to EPFO in February, the number dropped drastically to 3,32,773 in April, Mint reported, citing official data.

"The rebound of over 1.5 lakh companies by August indicates a revival," a government official said. The return also means a growth in EPFO's subscriber base, which had slumped to a low in April, the official added.

Moneycontrol could not independently verify the report.

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It is mandatory for companies and establishments with 20 or more employees to contribute to EPFO. While 12 percent of employee's basic salary is to be contributed to EPFO, the Centre had in May reduced statutory provident fund contribution rate to 10 percent. The reduced EPF contribution amount was for three months.

Starting August, the EPF contribution is back to the earlier contribution of 24 percent, which would be 12 percent each from the employee and the employer.

Meanwhile, around 8 million subscribers have withdrawn as much as Rs 30,000 crore in less than four months starting April.

The amount withdrawn by EPFO subscribers exceeded the usual outgo recorded during the period, which could be due to layoffs, pay cuts and medical expenses.

The Ministry of Finance had in March said EPFO subscribers can withdraw up to 75 percent of the amount or three months of the wages, whichever is lower, from their EPF accounts.

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Moneycontrol News
first published: Aug 20, 2020 04:03 pm
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