The Labour Ministry has notified new rules that permit for lowered EPF or staff’ provident fund contribution for 3 months. Last week, Finance Minister Nirmala Sitharaman had introduced discount of statutory provident fund contribution by each employers and staff to 10% of primary wages from the prevailing 12% for the following three months. The choice was taken to enhance take-home wage for workers and provides some aid to employers in fee of provident fund dues. It will inject liquidity of ₹6,750 crore to employers and staff over three months.
“Whereas due to Covid-19 pandemic, lockdown is in force across the country and the Central Government after making necessary inquiry is satisfied that to provide liquidity in the hands of employers and employees, there arises a need to amend the notification of the Government of India in the Ministry of Labour published in the Gazette of India, Extraordinary, Part II, section 3, sub-section(ii) vide number S.O. 320(E), dated 9th April, 1997,” the Ministry of Labour stated in a May 18 notification.
Here are 5 things to know about new EPF rules:
1) The choice is predicted to profit 4.Three crore staff and 6.5 lakh employers reeling beneath liquidity crunch due to COVID-19 lockdown.
2) This will probably be relevant for the three months – May, June and July.
3) The lower in EPF contribution will probably be relevant to all institutions coated beneath the Employees’ Provident Fund Organisation or EPFO, together with the exempted PF trusts.
4) However, central public sector enterprises and state PSUs will, nevertheless, proceed to contribute 12% as employer’s contribution in the direction of EPF.
5) The lower in EPF contribution won’t be relevant for employees eligible for 24% EPF help beneath PM Garib Kalyan Package.
Under the Pradhan Mantri Garib Kalyan Package (PMGKP), the federal government supported the fee of 12% of employer and 12% worker contributions into EPF accounts. This was prolonged for an additional three months – June, July and August.
This extension of the profit will present a liquidity aid of ₹2,500 crore to 3.67 lakh institutions and for 72.22 lakh staff.
Under Pradhan Mantri Garib Kalyan Package, the federal government pays 24% of the month-to-month wages into EPF accounts of wage earners incomes under ₹15,000 per thirty days, who are employed in institutions having up to 100 staff, with 90% or extra of such staff incomes month-to-month wages lower than ₹15000.