In a breather to employers, the Labour Ministry has proposed that contribution by companies towards their workers’ EPF schemes would be a portion of “contributory wages” which will not include house rent and travel allowances.
The concept of “contributory wages” for the purpose of PF deductions has been included in the Employees Provident Funds and Miscellaneous Provisions (Amendment) Bill, 2015, which will soon be placed before the Cabinet for approval.
“The Bill has been firmed up. It will be sent for Cabinet approval so that it could be introduced in the Monsoon session of Parliament,” a senior Labour Ministry official said. The final draft, prepared by the Labour Ministry, is significant dilution of concept of clubbing wages proposed by the labour unions.
While the unions wanted that 12 per cent PF contribution by the employers should be on total take home salary, the employers were opposed to the idea as it would have increased their PF liability and reduced workers’ pay.
The proposed Bill also provides one-time option to EPFO subscribers to choose between EPF and New Pension Scheme.
