Fresh formal hirings decline 3% in Jan, down for second straight month

In January last year, a total of 807,865 new subscribers had joined the Employees' Provident Fund (EPF)

Monthly fresh formal hirings under the Employees’ Provident Fund (EPF) declined for the second straight month in January, signalling further deterioration in the formal labour markets. In January, the number of new subscribers decreased by nearly 3 per cent to 823,000 from 846,734 in December, according to the latest monthly payroll data released by the Employees’ Provident Fund Organisation (EPFO) on Thursday.

 

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 are protected by labour laws.

 

In January last year, 807,865 new subscribers had joined the EPF. 

 

Of the 823,000 new subscribers in January, the share of young people (18-25 age group) declined to 57.07 per cent (470,000) from 57.28 per cent (485,066) in the preceding month. This is crucial because subscribers in this group are usually first-timers in the labour market, thus reflecting its robustness.

 

Meanwhile, the share of women among the new subscribers declined to 25.62 per cent (217,000) in January from 26.2 per cent (221,917) during the preceding month. 

 

Meanwhile, the 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 to the social security organisation — stood at 1.79 million in December. 

 

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

 

The Labour ministry also said that payroll data highlights that approximately 1.5 million members exited and subsequently re-joined EPFO, which depicts a significant year-over-year growth of 23.55 per cent compared to January 2024.

 

“These members switched their jobs and re-joined the establishments covered under the ambit of EPFO and opted to transfer their accumulations instead of applying for final settlement,” the labour ministry statement said.