EPFO pension and PF cover to self-employed, gig staff? Here's what we know

The Centre reportedly is planning to ask EPFO to design new provident fund and pension schemes for self-employed and gig workers under the Social Security Code, offering flexible contributions

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The central government is considering directing the Employees’ Provident Fund Organisation (EPFO) to design new provident fund and pension schemes for self-employed workers and gig-platform workers, The Telegraph reported.

 

The move follows the notification of the Code on Social Security, which expands the Centre’s powers to extend social security beyond traditional salaried employees.

 

What's the current landscape?

 

• EPFO coverage is limited to salaried employees in establishments with more than 20 workers.

• Mandatory EPF membership applies to employees earning up to ₹15,000 in basic pay plus dearness allowance.

• Employees earning above this limit can join only if their employers agree to contribute.

• Under ESIC, workers earning up to ₹21,000 per month are eligible.

• Trade unions have been demanding higher eligibility limits -- in some cases, double the current thresholds.

 

The Telegraph quoted a labour ministry official saying that the government is examining proposals to revise these limits, though “it might not be doubled".   

 

What’s new in the Code?

 

Last week, the Ministry of Labour and Employment notified all four new labour codes, including the Code on Social Security.

 

Section 15(1)(d) gives the Centre the power to “frame any other scheme or schemes... for the purpose of providing social security benefits... to self-employed workers or any other class of persons".

 

This enables the government to formally include self-employed individuals and gig workers under a structured PF and pension setup for the first time.

 

EPFO’s new assignment

 

Government officials cited by The Telegraph said the EPFO will now be asked to create a flexible contributory PF and pension framework for self-employed workers.

 

The report, citing a government source, noted that contributions will need to be designed keeping irregular incomes in mind:

 

“The self-employed people are unlikely to pay regularly as they do not have a fixed income. The scheme may allow the workers to pay at their convenience. Based on the deposited amount and accrual, the beneficiary’s pension or provident funds would be fixed," the source said, as quoted by the news report.

 

The source said the planned scheme would offer better returns and flexibility than existing products such as the Public Provident Fund (PPF).

 

Gig and platform workers

 

The Code on Social Security also creates a dedicated social security framework for gig and platform workers.

 

Section 114(4) requires aggregators, such as app-based delivery and ride-hailing companies, to contribute 1-2 per cent of their annual turnover to a new welfare fund to support PF, pension and insurance benefits.

 

The EPFO will prepare the design of this scheme as well.

 

Trade unions also want the government to ensure accurate reporting of turnover data by aggregators.

 

Broader goal: Universal social protection

 

The Code on Social Security, 2020 merges nine existing laws into a single framework. Its aim is to simplify compliance, improve efficiency and widen access to key benefits such as:

• provident fund

• pension

• health and maternity care

• life and disability insurance

• gratuity