Low salary, no PF deduction? Supreme Court ruling may change the game

New Delhi (The Uttam Hindu): News of significant relief has arrived for millions of employed people. If your salary is slightly more than 15,000 rupees and you have been excluded from the EPF (Employment Provident Fund) coverage, there is now hope. The Supreme Court has issued strict instructions to the Central Government and the Employees' Provident Fund Organization (EPFO) to make a final decision within four months regarding raising the EPF wage ceiling.

The order concerns a limit that has remained unchanged for the past 11 years. The court acknowledged that a significant number of employees are being deprived of social security schemes like the EPF due to the long-term absence of changes to the limit.

The Supreme Court issued this order during a public interest litigation hearing. The court stated clearly that it is now necessary to determine whether the pay limit should be increased. The court directed the central government and the EPFO ​​to make a timely decision on this issue.

Why has the salary limit been stuck for 11 years?

Currently, the salary limit under EPF is set at ₹15,000 per month. PF deductions are mandatory for employees whose basic salary and dearness allowance (DA) add up to this amount of ₹15,000. This limit was set in September 2014 and has remained unchanged since then.

During this period, inflation, minimum wages, and incomes have risen significantly, but the EPF salary threshold remains unchanged. Consequently, even a small salary increase leaves millions of employees outside the EPF coverage.

Employees are being deprived of social security

The petition states that due to current rules, a large number of employed people are excluded from important social security schemes like EPF. The purpose of EPF is to provide financial security after retirement, but the old salary limit is undermining this purpose. Now, following the Supreme Court's directive, it is expected that the government will soon take a decision on this matter, and the increased salary limit will allow more employees to avail of PF benefits.