New Delhi, September 16 (Daily Kiran) : The Indian government has approved a significant increase in the salary cap for mandatory coverage under the Employees’ Provident Fund Organization (EPFO), raising it from ₹15,000 to ₹25,000 per month. This decision, announced by the Union Cabinet, aims to provide broader social security for the nation’s workforce.
Union Labor and Employment Minister Dr. Mansukh Mandaviya expressed gratitude to Prime Minister Narendra Modi for this landmark decision. He emphasized that this move will not only enhance social security but also promote formal employment in the country.
In a post on the social media platform X, Dr. Mandaviya stated, “Today, under the leadership of Prime Minister Modi, the Cabinet has taken a vital decision to increase the EPFO salary limit. This will provide a comprehensive safety net for workers and boost formal employment opportunities. I want to inform all workers that this important decision will take effect tomorrow, coinciding with the auspicious occasion of Vishwakarma Jayanti and Service Day.”
According to an official statement, this decision is expected to benefit over 5.1 million additional employees, allowing them access to the Employees’ Provident Fund (EPF), Employees’ Pension Scheme (EPS), and the Employees’ Deposit Linked Insurance Scheme (EDLI).
The government believes that this change will not only strengthen social security but also encourage formal employment and enhance the long-term financial security of workers. The EPFO salary cap had remained unchanged at ₹15,000 from 2014 until this recent announcement, making this the first increase in nearly a decade.
The Ministry of Labor and Employment noted that wage levels and formal employment have steadily risen in recent years. Many states have minimum wages approaching the new EPFO limit, highlighting the need to align the EPFO framework with current economic conditions.
Previously, employees earning more than ₹15,000 per month were not automatically covered under the EPFO system, leaving many without access to critical social security benefits. With the new system in place, a significant number of workers earning between ₹15,000 and ₹25,000 will now be included, allowing them to benefit from a structured social security system.
The statement outlined three primary advantages for employees following the salary cap increase. First, they will gain regular savings under the Employees’ Provident Fund (EPF). Second, they will receive pension security through the Employees’ Pension Scheme (EPS) after retirement. Third, insurance protection will be available under the Employees’ Deposit Linked Insurance Scheme (EDLI).
Additionally, the pensionable salary and statutory contribution framework will better align with current wage levels. This decision is expected to promote formal employment, as more workers join the social security framework, enhancing job stability and encouraging longer tenures with employers.
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