The Union Cabinet has approved increasing the mandatory wage ceiling for Employees' Provident Fund Organisation (EPFO) coverage from Rs 15,000 to Rs 25,000 per month. This decision, based on recommendations from the Expenditure Finance Committee, aims to update social security benefits to reflect current wage growth and formal employment trends. The limit had remained unchanged since September 2014.
The Ministry of Labour & Employment estimates this expansion will bring an additional 51 lakh employees under the statutory social security net. Workers earning between Rs 15,000 and Rs 25,000 will now gain access to provident fund savings, pension benefits under the Employees' Pension Scheme, and insurance coverage via the Employees' Deposit Linked Insurance Scheme.
The government projects an annual expenditure of approximately Rs 11,339 crore for the revised arrangement, with a five-year cost estimated at Rs 56,696 crore. Currently, the EPFO covers about 7.98 crore members across 7.68 lakh establishments. Officials stated that the move is intended to strengthen long-term retirement security, improve worker retention, and support the formalisation of the workforce.
