Government wants PF cover in 10-worker units

NEW DELHI: Companies employing 10 or more workers may soon have to pay provident fund, a move aimed at increasing the coverage of the Employees' Provident Fund ( EPF) scheme and in line with the government's plan to ensure social security to a larger section of workers.

As of now, provident fund is mandatory in establishments employing 20 people or more under the social security net run by Employees' Provident Fund Organisation ( EPFO). If the move is notified, it will force small units to pay provident fund benefits.

The labour ministry is ready with an executive order as the legislative route to amend EPF and Miscellaneous Provisions Act would be time consuming and may face hurdles in the Rajya Sabha where the ruling BJP lacks numbers. The Employees' Provident Fund Organisation corpus will go up to Rs 20 lakh crore once the government lo wers the threshold for PF coverage to units employing 10 or more workers, from the current limit of 20.


“The labour ministry is ready with the proposal. The government is committed to bring more workers under the social security net. Around 50 lakh more workers will be covered under EPFO,“ a senior official said. “The EPFO kitty is going to swell to around Rs 20 lakh crore with the new addition and stricter enforcement,“ he added.

Justifying the move to amend the limit bypassing Par liament, a senior official said there was a provision in the EPF Act that empowers the government to change the threshold limit through an executive order. “The government is going to notify the changes very soon,“ the official said, adding that the notification could be issued after a two-month notice for consultation.

The pro-worker move was approved by the EPFO's apex decision making body, Central Board of Trustees, during UPA's tenure but it could not be implemented.