More than five million people employed in establishments that have 10 or more workers but less than 20 may soon come under the purview of the Provident Fund Act if the Central Board of Trustees (CBT) of the Employees Provident Fund Organisation (EPFO) clears a proposal to this effect at its meeting scheduled for Friday.
Being covered under the Act would entitle the workers to an employer contribution of 12 per cent of the basic pay, which the employers have to shell out over and above the present salary bill and would lead to mandatory savings.
The CBT of the EPFO will meet to consider extending the coverage of the PF Act to smaller establishments in order to provide social security to the workers employed there.
As of now, the Act covers only establishments with 20 or more employees. In the case of co-operatives the number is 50.
The new plan is to bring down the threshold limit for coverage from 20 to 10 for ordinary establishments and from 50 to 20 in the case of co-operative societies, a CBT member said
After the CBT approves the change, the Ministry of Labour will move a PF Act amendment proposal in Parliament to amend the provision of coverage, he said, adding that it may happen during the monsoon session because there is political unanimity on the subject.
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