Employers May Have to Contribute to PF of Employees Getting upto 15 K

Union Labour Minister Mallikarjun Kharge has hinted that employers will now need to contribute to PF of workers drawing a monthly salary upto Rs 15,000 which is now pegged at Rs 6,500.

According to reports, the minister is expected to ratify a proposal to this effect on Saturday, when he presides over a meeting of the Employees’ Provident Organization’s Central Board of Trustees.

Move, though set to benefit lakhs of workers, will hike corporate sector’s expenditure on labour. Furthermore, there might be a reduction in take home pay of a sizeable sections of the workforce.

As per convention, both employers and employees make a contribution of 12% each to the Employees Provident Fund. For employees drawing a higher income, the PF contribution by the employer is voluntary.

The ministry’s proposal was based on the recommendations of the Parliamentary Standing committee on Labour, which argued that the present wage ceiling lost its relevance in view of the rapid transformation in the economy and the consequent rise in wages.

It pointed out that the Employees’ State Insurance Corporation, also under the labour ministry, had revised its wage ceiling from Rs.6,500 to Rs.10,000, suggesting a similar PF hike.

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