Centre mulls hiking EPFO monthly wage limit to Rs 25,000-30,000: Report

The current ceiling was last revised in September 2014, making EPFO participation optional for workers earning above Rs 15,000 a month

• Govt may raise EPFO wage ceiling from Rs 15,000 to Rs 25,000–30,000 per month
• Supreme Court has asked labour ministry to review the ceiling within four months
• Move could expand EPFO coverage, including more unorganised sector workers

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A proposal to raise the monthly wage ceiling for coverage under the Employees’ Provident Fund Organisation (EPFO) is once again under consideration, a move that could substantially widen the social security net, a Times of India report said. The ceiling, currently set at Rs 15,000, may be increased to Rs 25,000–30,000 a month, the newspaper said.

The wage ceiling determines the salary level up to which employees in EPFO-covered establishments are required to make mandatory monthly provident fund contributions.

The government had earlier deliberated on raising the threshold to Rs 25,000, but the proposal was shelved following resistance from employers, many of whom argued for retaining the existing limit, TOI said. Some employer groups had suggested that any increase in the ceiling should be accompanied by a reduction in contribution rates. In contrast, several employee unions have pushed for a higher cut-off of Rs 30,000, according to the report.

The current ceiling was last revised in September 2014, making EPFO participation optional for workers earning above Rs 15,000 a month. Over the past decade, wages have risen sharply, with minimum monthly wages in several states— even for unskilled workers— now exceeding this level. As a result, a large section of low-income and minimum-wage earners remains outside the ambit of the social security system.

Earlier this week, the Supreme Court directed the labour ministry to review the wage ceiling within a four-month timeframe.

The proposal could help widen the subscriber base of EPFO and add more workers, especially from the unorganised sector, under the jurisdiction of the retirement fund body, the report said.

In addition, the plan comes amid the implementation of the new labour codes.