Budget proposal to cut women’s PF contribution to 8% faces opposition

Budget proposal to cut women’s PF contribution to 8% faces opposition

 

New Delhi, Feb 22: The Budget proposal to lower the rate of contribution for women workers under the Employees’ Provident Fund Organisation (EPFO) to 8 per cent from 12 per cent faced opposition from both workers and employers.
“There were some apprehensions from both sides.
We will take a call on the issue,” Labour and Employment Ministry Secretary M Sathiyavathy told reporters after attending a central board of trustees meeting of the retirement fund body, chaired by Labour and Employment Minister Santosh Gangwar here.
The labour ministry will now discuss the issue with its finance counterpart.
Finance Minister Arun Jaitley in his Budget 2018-19 speech had said women workers’ contribution towards EPF will be reduced to 8 per cent for the first three years, without employers’ contribution being reduced. This will allow more women to get into the formal economy, he had said.
While trade unions argued that the move will hit the social security savings of workers, employers said it would not incentivise them to hire more women employees.
Currently, both employers and employees are mandated to contribute an equal share of 12 per cent of the monthly income towards provident fund and pension schemes under the EPFO. The employers additionally contribute 0.5 per cent towards the EPFO’s Employees’ Deposit linked Insurance (EDLI) Scheme and 0.65 per cent towards administrative charges to the EPFO for maintaining provident fund accounts of employees.
The central board of trustees also decided to lower the administrative charges for employers from 0.65 per cent of the workers’ monthly income to 0.5 per cent.