Industries with 10 employees under EPF purview now

NEW DELHI: The Central Board of Trustees of the Employees Provident Fund Organisation (EPFO) on Saturday approved the reduction of threshold limit for establishments covered under the Employees Provident Fund and Miscellaneous Provisions Act (EPF & MP Act), 1952.

With this, establishments employing even 10 people will be covered under the Act and would have to contribute towards Employees Provident Fund accounts as against the existing 20, barring cooperative institutions functioning without power, where the limit has been reduced from 50 to 20 employees.

This decision was approved at the first meeting of the newly constituted EPF Board. This is the first time in 48 years that the threshold limit has been changed.

However, the Board meeting, chaired by Minister of State for Labour and Employment (independent charge) Oscar Fernandes, deferred a decision on fixing the rate of interest for the EPF for the current financial year.

The second Labour Commission and the Standing Committee on Labour had also recommended reducing the threshold limit in order to reduce the gap between coverage under EPF & MP Act, 1952 and the total workforce of the country. The social security benefits provided under the Employees State Insurance Corporation (ESIC) Act are already applicable to establishments with 10 or more employees. Therefore, this approval would bring parity with the ESI Act with regard to coverage and would help in unifying the social security efforts of the government. It will also help in channelling the registration of establishments and members of both the ESIC and the EPFO.