More contract workers to gain EPFO benefits

NEW DELHI: The labour ministry plans to extend the coverage of social security benefits under the Employees’ Provident Fund Organisation ( EPFO) to a larger number of construction and contract workers, a move that is in line with the series of labour reforms initiated by the government.

EPFO, a statutory body under the labour ministry, recently set up two sub-committees to study the gaps in coverage of construction and contract workers in the country under the EPFO net and suggest ways to extend its coverage. According to a senior government official, the two committees will identify all the eligible workers, who are not yet covered, and suggest ways to provide them benefits under the EPFO.

There are 45 million construction workers in the country, which makes the sector the third largest employer in the unorgansied or informal sector. Most of these workers are migrants.

Contract or temporary workers account for 28.8 million people in the formal/organsied sector. They are deprived of benefits like provident fund, minimum wages, gratuity and pension.

Besides, out of the total 397.4 million Indian workforce, 49.7 million are employed in the formal sector while 347.7 million are in the informal sector, thus deprived of all social security benefits that they would have been entitled to had they been under the EPFO umbrella.

A recent study by the Indian Staffing Federation showed that hiring of temporary workers is on the rise in government with 43% or 12.3 million of the total workforce in the government sector engaged in temporary jobs. “At least 6.9 million of this are engaged in flagship programmes of the government and are deprived of minimum wages with limited to nil social security cover,” ISF had found.

“Most short-term contract holders primarily receive a consolidated wage/salary with no additional contribution,” the report had said.