Employee Provident Fund Organization Likely to Raise Wage Ceiling, Covering More Employees

Indian Government is likely to revise the wage ceiling for Employee Provident Fund Organization (EFPO) from Rs 15000 per month ($181) to Rs 21000 per month ($254). Besides bringing in more workers under coverage, the new rule increases the mandatory contribution of both employees and employers.

 The Employees' Provident Fund Organization is one of the two in statutory social security bodies under the Government of India's Ministry of Labour and Employment and is responsible for regulation and management of retirement funds in India, the other being Employees' State Insurance.   The change will align the two social security schemes and ease the compliance burden on companies. Further, the ceiling is likely to be indexed to inflation and reviewed periodically. The change is likely to take place soon and would increase the annual employee cost of employees.

 HRPI Outlook: Companies will consider using this new ceiling for their total wage costs from Financial Year 2023-24 onwards.