Provident funds
On 5 June, the Central Board of Trustees of the Employees’ Provident Fund Organisation (EPFO) approved the lowering of the threshold limit for the applicability of establishments covered under the Employees Provident Fund and Miscellaneous Provisions Act, 1952.
As a result, establishments with a minimum of 10 employees will be required to contribute towards the provident fund accounts for its eligible employees, against the existing limit of at least 20 employees.
This threshold limit to cover establishments under the act has been changed for the first time since 1960. In recent times, the most significant amendment to the act with respect to its applicability, was in 2001 when the monthly salary limit of employees for coverage under the Employees’ Provident Fund Scheme, 1952, was raised from Rs5,000 (US$117) to Rs6,500. Unlike recent amendments to other labour laws, the salary threshold under the act remains the same.
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The legislative and regulatory update is compiled by Nishith Desai Associates, a Mumbai-based law firm that provides legal and tax counselling. The authors can be contacted at nishith@nishithdesai.com. Readers should not act on the basis of this information without seeking professional legal advice.
