Board moots EPF for unorganised sector

Securing future:There is no mandatory social security cover for workers in the unorganised sector at present.

Securing future:There is no mandatory social security cover for workers in the unorganised sector at present.  

The Central Board of Trustees (CBT) of the Employees’ Provident Fund Organisation (EPFO) on Thursday recommended to the Centre to extend social security benefits to more than 61 lakh workers in the unorganised sector.

However, the trustees decided to defer the proposal to amend the Employees’ Provident Fund and Miscellaneous Provisions Act for making provident fund contribution optional for employees in the apparel and made-ups sector following opposition from workers’ representatives.

“In an important decision, the central board recommended to the central government to consider issuing a notification for extending Social Security Benefits to the volunteers of various schemes workers i.e. Anganwadi, ASHA, Mid-day Meal Workers under the ambit of EPFO,” according to a statement from the EPFO.

Unions welcome move

D. L. Sachdev, national secretary, All India Trade Union Congress (AITUC) and member of the CBT said: “This is a landmark step taken by the board of trustees. Trade unions have been demanding social security cover to the entire workforce and this is a step forward in that direction.,”

The EPFO has proposed to the Labour Ministry that a lower contributory rate of 10% of income towards the Employees’ Provident Fund be allowed for scheme workers as against 12% contribution stipulated for the organised workers.

However, Mr. Sachdev said that the trade unions demanded that central government and state governments pay for the employer’s share of contribution towards the EPFO for the scheme workers.

According to estimates, there are 14 lakh Anganwadi workers, 12 lakh Anganwadi helpers, 25.5 lakh mid-day meal workers and 10 lakh ASHA workers in the country.

Centre’s notification

There is no mandatory social security cover for such scheme workers at present. However, the Centre can issue a notification to cover any class of establishments with a lower contributory rate under the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952.

The EPFO trustees also approved a new eligibility condition for grant of exemption to firms under Employees’ Provident Fund and Miscellaneous Provisions Act. Exempted firms are allowed to set up their own trusts to manage their workers’ EPF accounts as well as funds themselves.

“To be eligible to be considered for exemption under the Act, the establishments would henceforth require compliance with EPFO as an un-exempted establishment for a minimum period of 5 years, should employ at least 500 employees and their corpus should be at least Rs. 100 Crore at the time of seeking an exemption,” according to the statement.

Besides, the trustees also decided to allow all banks including private ones to collect contributions from employers and make payments to employees in addition to SBI, nationalised banks and payGov platforms on a pilot basis.

The proposal to increase wage ceiling for social security coverage under EPFO to Rs. 25,000 a month from Rs. 15,000 a month at present could not be taken up for discussion in the meeting held on Thursday.

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