EPFO social security cover: This task providing benefits to workers awaits in 2021
EPFO social security cover: Providing social security cover for over 40 crore unorganised sector workers, re-modelling existing schemes and incentivising fresh hiring will pose challenges for retirement fund body EPFO in the new year
EPFO social security cover: Providing social security cover for over 40 crore unorganised sector workers, re-modelling existing schemes and incentivising fresh hiring will pose challenges for retirement fund body EPFO in the new year.
The Employees' Provident Fund Organisation (EPFO), which now provides social security for more than six crore formal sector workers, will have a herculean task in improving the delivery of services with focus on implementation of the ambitious Aatmanirbhar Bharat Rojgar Yojana (ABRY) that seeks to boost fresh hiring in 2021. Pic Credit: PTI
With the Code on Social Security likely to come into force from April 1, the EPFO will also have to remodel its schemes and services as unorganised sector workers too will come under the social security umbrella.
There are over 40 crore unorganised workers in the country like gig and platform workers. The latter are those who are not on rolls of an establishment and don't get social security benefits like provident fund and gratuity.
Bharatiya Mazdoor Sangh's (BMS) former General Secretary Virjesh Upadhyay told PTI that the implementation of the Code on Social Security "would bring new challenges for the EPFO in 2021". Pic Credit: Reuters
EPFO schemes ambit expansion?
"The EPFO would have to expand the ambit of its schemes as well as network for providing social security to unorganised sector workers. These workers would get social security benefit under the Code," he said.
Upadhyay, also an EPFO trustee, opined that the body would have to remodel its schemes and services to provide social security for the unorganised sector workers. Pic Credit: PTI
EPFO Employers' share
Earlier, there was an issue on who will provide for the employers' share of contribution towards social security schemes run by the EPFO in case of informal workers.
Now, either the government will provide for the employers' share or the informal sectors will be allowed to subscribe to social security schemes wherein there will be contribution only from their side.
Depending on the model, the EPFO would have to redesign its system for delivery of services. Pic Credit: PTI
Presently, the EPFO has the infrastructure to provide services to over six crore subscribers and the same will have to bolstered so that it can cater to additional 40 crore workers from the unorganised segment.
Talking to PTI, Labour Secretary Apurva Chandra said the "main focus of the EPFO in 2021 would be on the ABRY to incentivise fresh hiring".
Chandra is also the Vice-Chairman of the EPFO's apex decision making body Central Board of Trustees.
"The other efforts on delivery of services would also continue. But the main focus would be on job creation through the ABRY," Chandra noted.
In post pandemic times, employment generation would be a daunting task for the government and it has chosen the EPFO to implement the ABRY. Pic Credit: Reuters
Earlier this month, the central government approved the ABRY to boost employment in the formal sector and incentivise creation of new employment opportunities under the Aatmanirbhar Bharat Package 3.0.
Total outgo for the scheme would be Rs 22,810 crore during 2020-2023 period. In the current fiscal, the outgo is pegged at Rs 1,584 crore.
The coronavirus pandemic has significantly impacted economic activites and there are now signs of recovery. Against this backdrop, the ABRY has been unveiled. Pic Credit: PTI
Under the scheme, the government will provide subsidy for two years in respect of new employees engaged on or after October 1, 2020 and up to June 30, 2021. It will pay both 12 per cent employees' contribution and 12 per cent employers' share -- 24 per cent of wages towards Employee Provident Fund (EPF) -- for two years. This will be for workers in establishments employing up to 1,000 people.
However the government will pay only employees' share of EPF contribution for two years in respect of new employees in establishments employing more than 1,000 employees.
The EPFO has been mandated to develop a software for the scheme as well as a procedure that will be transparent. It will also work out the modalities to ensure that there is no overlapping of benefits provided under the ABRY with any other scheme implemented by the EPFO. Pic Credit: PTI