Despite demands from trade unions and experts, the government has retained ₹15,000 per month as the wage ceiling for Employees’ Provident Fund Organisation (EPFO) even under the Code on Social Security 2020 which is mandatory to determine eligibility and contribution caps for social security benefits to workers.
Government sources indicated that maintaining the current ₹15,000 wage ceiling is only temporary, with an increase expected down the line. For now, the threshold remains unchanged to avoid putting more compliance burden on businesses and employers already grappling over the rise of remunerations to employees following implementation of Code of Wages 2019.
The Code’s new standardised definition of “wages” demands that basic pay and dearness allowance (DA) comprise at least 50 per cent of an employee’s total remuneration — a shift scaling up overall wage costs, sources explained.
The Ministry of Labour and Employment issued the notification for retaining this limit which has existed since September 1, 2014, when the government increased it from the earlier cap of ₹6,500 per month.
“In exercise of the powers conferred by clause (89) of section 2 of the Code on Social Security, 2020 (36 of 2020), the Central Government hereby notifies rupees fifteen thousand (₹15,000) per month as the wage ceiling for the purposes of Chapter III of the said Code,” read the notification issued on May 29.
