Employees have to contribute more to EPFO
Posted on: 16/Mar/2015 2:27:19 PM - No. of views : (1927)
Government of India is proposing to include all allowances in the wages for deducting PF contribution. Now employers as well as formal sector workers may have to contribute more towards Employees` Provident Fund.
As of now, the employees contribute 12 percent of their basic wages towards EPF contribution, with employers pitching in equally. Out of employers` contribution 3.67 percent goes towards EPF, 8.33 percent towards Employees` Pension Scheme and 0.5 percent towards the Employees` Deposited Linked Insurance Scheme.
The draft bill to amend the Employees` Provident Funds Miscellaneous Provisions Act 1952 provides that "Wages", means all emoluments or remunerations including all allowances payable to an employee in cash.
General Secretary Bharatiya Mazdoor Sangh and an EPFO trustee Virjesh Upadhyay while speaking about this said, "The employers split wages of workers into numerous allowances to reduce their PF liability. The proposed definition of wages in the bill will check such practices. "
The Labour Ministry is in the process of finalizing the bill as it has concluded tripartite consultations on the bill and received views of trade unions, employers` representatives and government bodies.
