The Central Board of Trustees (CBT) of the Employees Provident Fund Organisation (EPFO) on Saturday decided that employees working in small establishments having 10 or more workers will also get the benefits of the Employees’ Provident Fund & Miscellaneous Provisions Act (EPF & MP Act), 1952.
As of now, the Act is applicable only for establishments with 20 or more workers.
Following the CBT decision, the Ministry of Labour will now seek to amend the Act for which a formal proposal would be sent to the Cabinet Secretariat in a month’s time, officials in the Ministry said.
Once the Act is amended by Parliament, employers with 10 or more workers would come under the purview of the Act. This would mean that they will then have to shell out an additional 12 per cent of their employees’ salary every month and deposit the amount with the EPFO as employer’s contribution towards provident fund.
According to Mr D.L. Sachdev, Secretary of AITUC and a member of the CBT, “The change in the threshold number of employees is being made after 48 years. Bringing down the threshold limit from 20 to 10 for being covered by the EPF & MP Act will benefit at least 40-50 lakh people working in small organisations.”
With regard to the interest rate payable to provident fund subscribers for fiscal 2008-09, a decision was deferred.
While the trade union representatives in the CBT demanded that in view of the increasing interest rates and increasing inflation, which was 11.6 per cent in the week ended June 21, the EPFO should pay at least 12 per cent or more interest to its subscribers, the EPFO maintained that only 8.25 per cent could be paid from its interest earnings during the year. For 2007-08, the EPFO had paid 8.5 per cent interest to its subscribers.
The Minister for Labour, Mr Oscar Fernandes, who is also the CBT Chairman, has assured that he will take up the issue of higher interest rate with the Prime Minister.
(Businessline dt. 6.7.08)
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