Govt disbursed around Rs 13300 crores thru EPFO COVID-19 advance claim: Santosh Gangwar

Mumbai, December 16, 2020: The central government has approved more than 52 lakh claims and disbursed around Rs 13300 crores through the Employment Provident Fund organisation (EPFO)’s special COVID-19 advance claim to help out the formal sector workers, stated Minister of State, Labour, and employment, Shri Santosh Gangwar at a session on labour reforms at the ‘ASSOCHAM Foundation Week’ organised by The Associated Chambers of Commerce and Industry of India (ASSOCHAM) to commemorate the 101st anniversary of the organization.
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Highlighting the steps taken by the Labour Ministry, the honourable minister informed that under the Atal Bimit Vyakti Kalyan Yojana, those insured who have lost their jobs due to the lockdown will be paid 50 per cent of their last drawn salaries for the period of three months as employment remuneration to help them sustain during these challenging times.
“As a part of the direct help to the workforce, under the Aatmanirbhar Bharat Rozgar Yojana, for all new employees who have joined the workforce between 1st October 2020 -30th June 2021, will be paid a contribution of 24 per cent in their EPF account for a period of two years. This benefit would be provided to employees with a salary of less than Rs 15000 per month,” he said.
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The minister further explained that to avail the benefit, the employers with staff strength of less than 50 employees will have to employ 2 new employees and those with staff strength of more than 50 will have to hire at least 5 new staff members.  “Those who have lost their jobs during the COVID lockdown and are reinstated would also be eligible to avail the benefit,” he informed.
Companies with more than 1000 employees would get an additional benefit through a 12 per cent employee’s contribution paid by the central government. “Through these schemes not only new employment opportunities are created, but a direct benefit would also be passed on to the companies,” he added.
According to the honourable minister, all the 50 crore workforce have been brought under the purview of the Minimum Wages Act. “Provisions of the OSH Code have been introduced to provide workers with a safe working environment. Through the Social Security Code, several important measures have been taken to establish Universal Social Security Coverage. In addition, a simple and transparent dispute settlement system has also been established through the IR code,” the minister pointed out.
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Speaking about the Fixed Term Employees, he also stated that the government would ensure that they would have all the facilities and benefits that a regular employee enjoys. “The labour ministry with an intention to simplify the labor codes has decided to eliminate multiple registration requirements. So now, instead of registrations under 8 different acts, only one registration would be sufficient. Also instead of 3 licenses under various laws, only one license would be enough,” he revealed.
He informed that the Draft for the IR Code, OSH Code and Social Security Code is ready and notified. “We have been asking suggestions from all the stakeholders and common citizens on the Ministry’s website,” he said.
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To lighten the burden of the business units, several permissions, licenses and approvals would be provided the ‘deemed approval’ facility, he said. “We believe that through these measures, while there would a marked improvement in the ease of living for the workforce, it would also encourage a lot of new businesses to flourish,” he added.
Dr. Niranjan Hiranadani, President, ASSOCHAM said, “While labour reforms intend to make ease of doing business, an amendment in the provisions of ESI Corporation is the need of the hour. Especially, a due consideration needs to be given to public-private participation which will significantly improve the condition of the infrastructure of ESI Hospitals, increase indirect employment and will ensure an improvement of the required facility inside hospitals to the patient workers and their families”.

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The Employees’ Provident Fund Organisation (EPFO) on Wednesday increased the maximum assurance benefit to up to Rs. 7 lakh from the existing cover of Rs. 6 lakh under the Employees’ Deposit Linked Insurance (EDLI) scheme.
Employees’ Deposit Linked Insurance, EDLI is an insurance cover provided by the Employees’ Provident Fund Organization (EPFO). A nominee or legal heir of an active member of EPFO gets a lump sum payment in case of the demise of the member during the service period.
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In the 227th Meeting of the Central Board of Trustees (CBT), the board accorded approval for amendment of paragraph 22(3) of Employees’ Deposit Linked Insurance Scheme, 1976 to enhance the maximum assurance benefit to Rs 7 lakhs from the present maximum assurance benefit of Rs 6 lakhs.

“All organizations covered under Employees’ Provident Fund (EPF) and Miscellaneous Provisions Act, 1952 get enrolled for EDLI automatically.”

This scheme works in combination with EPF and EPS. There is no exclusion under this scheme and the insurance cover depends on the salary drawn in the last 12 months of the employment before death.
Both employee, as well as the employer, contribute to all three schemes run by the EPFO. The contribution made by the employer to EDLI is 0.5% (subject to a maximum of Rs 75).
The recent amendment will provide additional succour to families and dependents of members of the Scheme in case of their unfortunate death while in service. CBT was also informed that the actuarial valuation of EDLI Fund has allowed for the continuation of minimum assurance benefit of Rs 2.5 lakhs beyond February 14, 2020, and extension of minimum assurance benefit of Rs 2.5 lakhs to the family of those deceased members who were employed in multiple establishments during the 12 months preceding the month in which they died, as approved by CBT EPF in its 226th meeting.
In view of exceptional circumstances arising out of Covid-19, the agenda regarding interest rate was reviewed by the Central Board and it recommended the same rate at 8.50% to the Central Govt.
It would comprise of 8.15% from debt income and balance 0.35% (capital gain) from the sale of ETFs subject to their redemption by 31st December 2020.
It further recommended accounting such capital gains in the income of the financial year 2019-20 as being an exceptional case. The Central Board was apprised of the various initiatives taken by EPFO for extending nirbadh seamless service to stakeholders during the Covid-19 pandemic.
Members of the Board appreciated these initiatives and gave suggestions to further improve service delivery to all stakeholders.

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EPFO enrolment rates increase; 3.18 lakh net new subscribers registered in May 2020 against about 1 lakh in April

The provisional payroll data published by EPFO on 20th July, 2020 reveals that net new enrolments has started to make headway for most industry classifications in May 2020. The subscriber base has grown by 3.18 lakh new net members during May 2020, registered a whopping 218% month on month growth. Despite the lockdown, around 1 lakh net new subscribers were added to social security schemes of EPFO in April 2020. The data published comprises of all the new members who have joined during the month and whose contribution is received.
The subscriber base growth is on account of increased number of new subscribers, lower exits and higher rejoining by exited members. The new subscriber joining has increased roughly by 66 % from 1.67 lakh in April to 2.79 lakh in May 2020.In addition, the exits from EPFO subscriber base declined by nearly 20% from 2.97 lakh in April to 2.36 lakh in May 2020.
The number of members who exited and then rejoined, indicates switching of jobs by subscribers within the establishments covered by EPFO.  This has also increased by approximately 19% for the month of May 2020 over April 2020, with more subscribers choosing to retain membership by transferring funds rather than opting for final settlement.
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Category wise analysis of industry indicates that building & construction sector, hotels, transport; electrical, mechanical or general engineering products; education and textiles were adversely impacted by the COVID-19 pandemic in the month of April 2020. Most of these sectors had registered negative enrolment for April 2020. Expert services industry classification that added almost 4 lakh members every month during pre-Covid-19 period, had added only around eighty thousand members during April 2020. Expert services predominantly consist of man power agencies, private security agencies and small contractors.
All these sectors, except the education sector which is still affected due to lockdown continuing in schools and colleges, have shown positive growth for the month of May 2020. Expert services have recorded a 125% month on month growth by adding around 1.8 lakh net new subscribers in May 2020.
New establishments registered with EPFO also witnessed a growth of around 72% with 8367 new establishments registering in May compared to 4853 establishments in April 2020. Similarly, in terms of establishments filing first ECR, the payroll data registered a growth of around 98% for the month of May as compared with April 2020.
EPFO manages social security funds of workers in the organized/semi organized sector in India and has more than 6 crore active members. The payroll data is provisional as updation of employee records is a continuous process and it gets updated in subsequent months.
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