‘Don’t cut salaries’: Govt’s clear directive to companies as EPF wage ceiling rises

AI Summary

India raised the Employees’ Provident Fund Organisation wage ceiling from Rs 15,000 to Rs 25,000, potentially extending mandatory coverage to more than 10 million additional workers. The government cautioned that the change increases employers’ costs and instructed companies not to cut salaries.

On September 17, the government increased the EPFO wage threshold from Rs 15,000 to Rs 25,000. The revision is expected to extend mandatory coverage to more than 10 million additional workers and give another push to workforce formalisation. In the frequently asked questions released on the matter, the ministry acknowledged that the revised wage ceiling would inevitably raise employers' costs.