Law Ministry vetting Bill to amend EPF & MP Act

NEW DELHI: The proposal to provide an option to choose between EPF and NPS for over 5 crore subscribers of the retirement fund body EPFO has been sent to the Law Ministry for vetting.

The government, in its Mid-Year Economic Analysis for 2015-16, said: "The Cabinet note for amendment to the EPF & MP Act, 1952 has been sent to the Legislative Department of the Ministry of Law and Justice."

The mid-year analysis was tabled in Parliament today.

The government wants to amend the Employees' Provident Funds and Miscellaneous Provisions Act (EPF & MP), 1952.

It also aims to amend the definition of wages, which would include basic pay and all allowances paid to workers.

The definition change would increase PF contribution by workers and employers, but result in higher savings for employees.

According to the revised definition of wages, all emoluments or remunerations, including all allowances, would be payable to an employee in cash.

As a normal practice, some employers split wages of workers into numerous allowances to reduce PF liability, which is precisely what the amendment seeks to address.

It further said a tripartite consultation for amendment of the Employees' State Insurance (ESI) Act, 1948, was held on August 13, 2015. Besides, a meeting with trade unions took place on October 6, 2015.

"Based on the feedback received from central trade unions, further action is being taken," it added.
On the ESI Act, the government proposes to provide an option of choosing either ESI or a health insurance product recognised by the Insurance Regulatory and Development Authority of India ( Irdai).