EPFO Plans to Reduce the Strength of Employees to 10 for the Purpose of Coverage

In order to provide social security to millions of workers who are beyond the ambit of provident fund benefits under the Employees’ Provident Fund Organization, the labour ministry has decided to reduce the minimum strength of eligible employees to ten for the purpose of extending the coverage to the maximum limit. Currently, the total strength of employees required for the purpose of coverage under the Employees’ Provident Fund & Miscellaneous Act, 1952 is twenty.

As per the labour ministry, which is planning to reduce the strength to ten from the existing strength of twenty employees through an executive order is hopeful that such change will bring an additional five million workers under the coverage of EPF & MP Act and benefits provided under such Act. Talks regarding the amendment of EMP & MP Act, 1952 are also going on. The Act itself allows change in number of eligible employees for the purpose of coverage under this Act through a notification with a time limit of two months for consultation and/ or modification. Since such amendment does not require permission from the Parliament, the officials of the labour ministry are very much keen on publishing a notification soon. It is pertinent to mention that the EPFO’s apex decision making body the central board of trustees have already approved the decision of reducing the strength of eligible employees to ten in 2008, but for reasons unknown, it could not be implemented till today.

Such decisions, if implemented soon will bring a lot of workers under the coverage of the EPF & MP Act and they will be able to enjoy the benefits of provident fund. However, on the other hand, it will create a huge financial burden of the small scale industries and employers.

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