On 17 September, the Labour and Employment Ministry lifted the EPFO wage ceiling from ₹15,000 to ₹25,000, instantly bringing over 10 million workers under mandatory provident fund coverage. Employees earning between ₹15,001 and ₹25,000 will now be enrolled, expanding the formal employment net across the country.
The ministry cautioned that firms cannot offset the extra ₹1,200 employer contribution by trimming statutory wages; instead, it must be treated as a separate social security expense. Any attempt to reclassify the contribution within the cost‑to‑company would violate labour laws.
To ease the financial hit, the government offers up to ₹3,000 per month incentive for each new hire under the Pradhan Mantri Viksit Bharat Rojgar Yojana. Employers who bring in fresh talent will receive this subsidy, helping balance the higher EPF outlay. The incentive is capped at 12 months for each employee.
The directive urges companies to act immediately: identify affected staff, calculate contributions, enrol, remit, and reconcile without delay. Firms are warned that postponing these steps could expose them to penalties.
Workers newly covered will see their employer’s 12% contribution split between EPF and EPS, with 8.33% directed to pension. Existing members on wages above ₹25,000 face no change in total contribution. A Bengaluru delivery rider, who earned ₹18,000 last month, will now receive formal EPF enrolment and a pension pot that accrues higher interest.