Wage support to be made available through EPFO contribution

The Union Cabinet on Wednesday approved the Atmanirbhar Bharat Rozgar Yojana. Under the scheme the Centre will contribute to the retirement fund EPFO for new employees hired on or after October 1, 2020 to June 30, 2021 with monthly wage up to ₹15,000.

The support will be made available for two years and will cost over ₹22,810 crore to the Government.

Labour Minister Santosh Kumar Gangwar expects more jobs to be created, though he did not share details of how many job opportunities will be created. “We hope take-home salary of employees with wages with up to ₹15,000 will go up,” he said while briefing on the Cabinet decisions.

The scheme intends to “incentivise creation of new employment opportunities during the Covid recovery phase” through support by way of contribution towards Employee Provident Fund. Gangwar said the scheme will not just encourage formal sector but also prompt informal sector to get registered under EPFO for the benefit.

The new scheme will cover any new employee joining employment in EPFO registered establishments on monthly wages less than ₹15,000. Also, EPF members drawing monthly wage of less than ₹15,000, who lost their job during March-September but re-employed on or after October 1, will be covered.

According to the scheme, if an enterprise has 50 or less number of employees as on September 30, it will need to add at least two employees to get the benefit. Similarly, an enterprise with more than 50 employees as on September 30, needs to add at least 5 new employees to get the benefit under the scheme.

For establishments employing up to 1,000 employees, subsidy will be employee’s contributions (12 per cent of wages) and employer’s contributions (12 per cent of wages) totalling 24 per cent of wages. Establishments employing more than 1,000 employees will have only employee’s EPF contributions (12 per cent of EPF wages). The subsidy support will get credited upfront in Aadhaar-seeded EPFO Account (UAN) of eligible new employee.

Gangwar said the benefit is almost the same as benefit under the PMRPY (Pradhan Mantri Rojgar Protsahan Yojana) which the government had launched in 2016 and which ended in 2019. During that period, 1.21 crore employees benefitted under PMRPY and formalisation of employment had happened in India. “During the last scheme it was only 12 per cent contribution, but this time it is 24 per cent and that will make lot of difference,” he said.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *