EPFO Updates: There has been no change in the salary for the last 11 years, whereas the minimum salary fixed by the Central Government and many State Governments is much higher than the EPFO salary limit of Rs 15,000 per month.
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EPFO Updates: The Supreme Court on Monday asked the central government to decide within four months on revising the pay ceiling for the Employees’ Provident Fund Organisation (EPFO) scheme. The top court gave this order after it was told that the pay ceiling for EPFO has remained unchanged for the last 11 years.
A bench of Justices JK Maheshwari and AS Chandurkar issued this order while disposing of a petition filed by social activist Naveen Prakash Nautiyal. The petition claimed that the Employees’ Provident Fund Organization currently excludes from coverage those whose monthly salary exceeds ₹15,000.
Disposing of the petition, the bench directed the petitioner to submit a representation to the Central Government within two weeks, along with a copy of this order. It also directed the Central Government to take an appropriate decision within four months regarding the change in the salary limit for EPFO.
No change in salary for 11 years
Advocates Pranav Sachdeva and Neha Rathi, representing the petitioner, told the bench that there has been no change in salary for the last 11 years, while the minimum salary set by the Central Government and several state governments is significantly higher than the EPFO’s salary limit of ₹15,000 per month.
He told the bench that due to this, most employees/workers have been deprived of the benefits and protections of the EPFO scheme. Advocate Sachdeva told the bench that employees earning salaries above the prescribed limit do not receive the benefits of the EPFO scheme.
The long-term absence of changes in the pay ceilings is detrimental to the enforcement of fundamental rights under Articles 14 and 21, and arbitrary and irregular changes in the pay ceilings under the Employees’ Provident Fund Scheme, 1952, enacted under the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952, harm employees.
The government has changed the pay ceilings irregularly, sometimes after 13-14 years, without any fixed timeframe or without considering relevant economic indicators such as inflation, minimum wage, per capita income, or consumer price index.
Large sections of the workforce excluded
The petition states that a large section of the workforce has been excluded irregularly, which is against the objective of providing social security to workers in the organized sector. The Public Accounts Committee of the 16th Lok Sabha and the EPFO’s own Sub-Committee (2022) have both recommended timely and appropriate revisions to the pay ceiling, but despite approval from the Central Board in July 2022, the Central Government has not acted on these recommendations.
The petition states that the pay ceiling revisions over the past 70 years have not been consistent by any metric. The Central Government has done so without considering the minimum wages of its employees, the income tax exemption limit, the annual growth rate in per capita net national income, the minimum wage, and the annual inflation rate.
“A statistical analysis of the wage ceiling revisions over the past 70 years reveals that they have not been consistent by any of the above metrics. While the wage threshold remains at ₹15,000, many states have minimum wages much higher than this. This has reduced the coverage of the scheme, thus defeating the objectives of the law.
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