Fresh formal hirings decline by 3% in December, shows EPFO data

The EPFO data is considered crucial as it reflects the state of the formal labour market. Only the formal workforce enjoys social security benefits and is protected by labour laws

The number of monthly fresh formal hirings saw a decline in December, signalling a deterioration in the formal labour market during the month.

 

In December, the number of new monthly subscribers under the Employees’ Provident Fund (EPF) decreased nearly 3 per cent to 847,000 from 874,000 in November, according to the latest monthly payroll data released by the Employees’ Provident Fund Organisation (EPFO) on Tuesday.

 

The EPFO data is considered crucial as it reflects the state of the formal labour market and only the formal workforce enjoys social security benefits and is protected by labour laws.

 

Of the total 847,000 new EPF subscribers in December, the share of the 18-25 age group increased to 57.3 per cent (485,000) from 54.9 per cent (480,600) in November.

 

This is crucial because subscribers in this age group are usually first-timers in the labour market, thus reflecting its robustness.

 

Meanwhile, the share of women among the new subscribers declined to 25.9 per cent (220,000) from 27.4 per cent (239,800) during the preceding month.

 

Meanwhile, net payroll additions — calculated by taking into account the number of new subscribers, the number of subscribers that exited, and the return of old subscribers — stood at 1.6 million in December. 

 

Net monthly payroll numbers are, however, provisional and are often revised sharply the following month. That is why the new EPF subscriber figure is considered more reliable than net additions.

 

“The payroll data highlights that around 1.51 million members exited and subsequently rejoined EPFO. This figure represents a 5.1 per cent increase compared to the previous month. These members switched their jobs and rejoined establishments covered under the ambit of the EPFO. They opted to transfer their accumulations instead of applying for final settlement. This safeguarded long-term financial well-being and extended their social security protection,” the labour ministry said in a statement.