EPF net to be widened, pink slip insurance likely

NEW DELHI: Call centres, cellphone operators, medical transcriptions and a host of new generation services are set to be brought under the EPF net with the government proposing amendments to the EPF & MP Act 1952.
These amendments, along with a few others — to reduce the threshold for EPF coverage from 20 to 10 employees, delinking pension contributions from provident fund and introduce an employer-funded insurance scheme to provide a one-year safety net through an insurance scheme to cover involuntary unemployment — are set to be taken up by the Central Board of Trustees of the EPF tomorrow.
All these measures are aimed at expanding the reach of the EPF and creating a safety net for involuntarily displaced employees.
According to officials, new services and new classes of employment would be brought under the purview of the EPF act by replacing the existing schedule of industries and classes of establishment with a short negative list.
This negative list is likely to include organisations like charitable institutions, which provide a pass through function and hence the employer does not have profits to fund the employer’s contribution to EPF.
The negative list would also contain government servants, who are covered under the GPF.
At present, under the provisions of the EPF & MP Act, 1952, the labour ministry notifies industries and establishments which are covered by EPF.
All employers employing more than 20 employees in the notified sector have to deduct EPF and remit it to the government (or the exempt trusts) along with the employer’s contributions.