Noida protest: Minimum wage hikes may push workers out of EPFO net, say experts

Recent increases in minimum wages in states like Uttar Pradesh and Haryana could lead to several workers moving out of the mandatory provident fund net, as the current wage ceiling for compulsory contributions to the Employees Provident Fund Organisation (EPFO) remains capped at Rs 15,000 per month, The Times of India reported.

Amid ongoing labour protests, the Uttar Pradesh government has raised minimum wages for semi-skilled and skilled workers to over Rs 15,000 in districts including Ghaziabad and Gautam Budh Nagar from April 1. In Haryana, even unskilled workers now have a basic minimum wage of Rs 15,220.

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Under existing EPFO rules, coverage is mandatory only for employees earning up to Rs 15,000 a month. “The current notification crosses this threshold, making it voluntary for workers to join. However, a decline in coverage is not foreseen,” an official told TOI.

Data cited in the report shows that in most states and Union Territories, minimum wages for semi-skilled and skilled workers now range between Rs 15,000 and Rs 20,000 per month, while states such as Delhi and Kerala report wages of around Rs 22,000 for certain categories.

The Centre has been considering raising the EPFO wage ceiling to Rs 25,000, but the proposal has seen limited progress due to resistance from employers. However, the latest wage revisions are expected to renew momentum for the move.Economists say the trend of rising minimum wages breaching the EPFO threshold underscores the need for reform. Amit Basole, professor at Azim Premji University, told TOI that EPFO coverage is increasingly skewed towards higher-income workers. “Its high time that EPFO revises its wage ceiling to around Rs 22,000–25,000 so that workers at the bottom of the pay scale are statutorily covered,” he said.

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Labour economist KR Shyam Sundar also flagged concerns around enforcement, noting that non-compliance with minimum wage norms remains widespread, particularly among contractors and smaller establishments.

The report noted that unless the EPFO wage ceiling is revised, more workers could fall outside the ambit of mandatory social security coverage despite earning at or near minimum wage levels.