EPFO unveils new benefits for nominees: A boon for job switchers

New Delhi (The Uttam Hindu) : There's good news for employees and their families. The Employees' Provident Fund Organization (EPFO) has issued an important circular, offering significant benefits to employees who change jobs. Under this new EPFO ​​decision, any gap in service due to weekends or government holidays will no longer be considered a service break. This will prevent disputes, especially in matters related to death claims and insurance.

Service will not be broken due to holidays

EPFO ​​has clarified that if an employee leaves one organization and joins another job, and the only time the employee leaves falls on a Saturday, Sunday, or a declared holiday, it will not be considered a break in service. Previously, several such cases have been reported where service was considered broken due to weekends, and the employees' families were deprived of insurance and pension benefits.

Why this decision was taken:

According to the EPFO, in many cases, after the death of an employee, their family members' Employee Deposit Linked Insurance (EDLI) claims were rejected or received a lower amount due to a difference of just a few days. Sometimes, dependents suffered losses due to technical flaws in service calculations. This new circular has been issued to address these issues.

New Definition of Continuous Service

Now, if an employee's transition from one job to another is limited to weekly offs, national holidays, gazetted holidays, state holidays, or restricted holidays, the transition will be considered continuous service. The EPFO ​​has also clarified that even if there is a maximum gap of 60 days between changing jobs, the service will still be considered continuous.

Major relief for families in EDLI claims:

The EPFO ​​has increased the minimum amount payable under the EDLI scheme to ₹50,000. This minimum payment will now be available to the nominee or legal heir even if the employee has not completed 12 months of continuous service or has an average PF account balance of less than ₹50,000.

The new rule will also apply to cases where an employee dies within six months of their last PF contribution, provided the employee is registered in the employer's records. This will now provide families with relief from lengthy legal processes and unnecessary disputes regarding insurance claims.