Is the EPF wage cap set for a change? Here's what the government said

Centre signals no immediate move to raise EPF wage ceiling; further consultations likely

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The long-standing demand to raise the basic wage threshold for compulsory Employees’ Provident Fund (EPF) coverage came up again in Parliament this week. Employee groups and trade unions have, for years, argued that the current limit of Rs 15,000 is outdated and excludes a large section of the organised workforce. Increasing the ceiling, they say, would bring more workers under formal retirement savings.

 

The subject resurfaced during the opening day of the Winter session, when Labour and Employment Minister Mansukh Mandaviya was asked if the government plans to increase the mandatory EPF ceiling to Rs 30,000.

 

What the minister said

Mandaviya made it clear that any revision cannot be unilateral and must follow detailed discussions with all affected groups. 

He noted that a higher wage ceiling would influence both take-home pay for employees and hiring costs for employers, making consultation with trade unions and industry bodies essential.

 

At present, enrolment under the EPF Scheme, 1952 is compulsory for employees earning up to Rs 15,000 in establishments covered by the Employees’ Provident Fund Organisation (EPFO). Those joining after 1 September 2014 and earning above this limit may participate voluntarily, but they are not required to do so.

 

The wage threshold was last revised more than a decade ago, in 2014, when it was increased from Rs 6,500 to Rs 15,000 per month.

 

What a higher ceiling could mean

If the limit were raised to Rs 30,000, mandatory PF contributions would extend to employees earning up to that level. For workers, this would mean a larger portion of their salary diverted towards long-term retirement savings and reduced immediate take-home pay. For employers, the statutory contribution outgo would increase.

 

However, the minister did not indicate any timeline for a decision, signalling that the matter remains in the consultation stage.

 

Gig workers remain outside EPF

 

The government also clarified that gig workers and platform-based service providers will not be brought under the EPF Scheme, as their work arrangements do not fall within the traditional employer-employee framework on which PF benefits are based.

 

Instead, gig workers are covered under separate provisions within the Code on Social Security, 2020, which envisage welfare measures such as insurance, maternity support, old-age protection, and the creation of a Social Security Fund for these categories.