EPFO wage ceiling: Many worker groups in India have been asking for a long time to increase the salary limit under the Employees’ Provident Fund Organisation. Right now, the basic salary limit stays at Rs 15,000 per month. Because of this limit, many workers do not get EPF benefits even though they still need social security support.
Earlier this week, the Supreme Court stepped in and asked the central government to look into this issue. The court told the government to take a decision within four months on whether to revise the Rs 15,000 salary ceiling for joining the EPF scheme. A Bench led by Justices J.K. Maheshwari and A. S. Chandurkar passed this direction.
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The case came before the court after activist Naveen Prakash Nautiyal filed a petition. He said the EPFO leaves out workers who earn more than Rs 15,000 per month. The plea pointed out that many employees earn slightly more than this amount but still deserve provident fund and insurance protection. As per current rules such workers stay outside EPF unless their employer agrees to include them.
How EPF, EPS and EDLI Rules work?
The wage ceiling of Rs 15,000 decides who must compulsorily join three schemes under EPFO. These schemes include the Employees’ Provident Fund, the Employees’ Pension Scheme, and the Employees’ Deposit Linked Insurance Scheme. Workers earning up to Rs 15,000 must join EPF and EDLI. For those earning above this limit, joining becomes optional and needs employer approval.
The EPFO runs all three schemes together. EPF and EPS help workers save money for retirement. EDLI works as a life insurance cover for employees. Even though EPF and EPS need worker contributions, EDLI does not take any money from employees.
The EDLI scheme started in 1976. Every employee who gets EPF automatically becomes part of EDLI. The employer alone pays for this insurance. The employer contributes 0.5% of wages towards EDLI. When a claim is filed the EPFO usually clears it within 20 days so that families get quick help.
What EDLI Insurance gives to families?
The main goal of the EDLI scheme is to support a worker’s family if the worker dies while still in service. If such a sad event happens, the nominee or legal heir gets insurance money. The amount depends on the employee’s income and EPF balance.
The minimum insurance amount under EDLI is Rs 2.5 lakh. The maximum benefit goes up to Rs 7 lakh. This benefit is only given if the employee was working at the time of death. The money goes to the nominee named in EPF records.
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EDLI applies to all employees whose basic salary stays below Rs 15,000 per month. If the salary goes above Rs 15,000, the maximum benefit still remains capped at Rs 7 lakh. Many employee groups believe that increasing the salary limit will allow more workers and families to get EPF savings and EDLI insurance protection.
