To strengthen the social security of employees working in the organized sector, the central government can increase the minimum wage ceiling under the Employee Provident Fund (EPF) from the current Rs 15000 to Rs 21000. Apart from this, the number of 20 employees for any company to join EPFO can be reduced to 10-15 so that more and more companies can be brought under the purview of EPFO.
The last time the minimum wage limit under the Employee Provident Fund was changed was in 2014. Then the minimum wage limit was increased from Rs 6500 to Rs 15000. But no change has been made in this limit in the last 10 years. According to the Economic Times report, the current Labor and Employment minister Mansukh Mandaviya is reviewing all pending cases and the government also believes that the minimum wage limit for the Employee Provident Fund needs to be increased along with the limit of the number of employees to join EPF.
By making the minimum wage limit Rs 21000, more money will be deducted from the salary of the employees for the Provident Fund and the contribution to the Employee Pension Scheme (EPS) will also increase. Under the Employee Provident Fund, both the employee and the employer are required to contribute 12 percent of the basic salary to the EPF. While 12 percent of the employee's share is deposited in the EPF account, out of the 12 percent of the employee's share, 8.33 percent of the amount is deposited in the EPS (Employees Pension Scheme) and 3.67 percent in the EPF account. With the increase in the minimum wage limit under EPF, not only will more money be deposited in the EPF account from the employee's salary, but the EPS contribution will also increase.
In fact, the demand for increasing the minimum wage limit has been made several times in the meeting of the Central Board of Trustees of EPFO, whose members are members of employee unions.
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