Millions Deprived of PF Benefits: Supreme Court Directs Government to Take a Decision on Wage Limit Within Four Months

New Delhi: In a significant development for private sector employees, the Supreme Court has directed the central government to take a decision on revising the wage limit for the Employees’ Provident Fund (EPF) scheme within four months. The wage limit has not been revised in the past 11 years, resulting in many employees being excluded from the social security and provident fund benefits.

A bench of Justices J.K. Maheshwari and A.S. Chandurkar gave this directive on Monday, responding to a petition filed by social activist Naveen Prakash Nautiyal.

According to the petition, the Employees’ Provident Fund Organisation (EPFO), which operates social security schemes for workers, does not include employees with a monthly salary above ₹15,000 in the EPF scheme. The petitioner’s lawyers, Pranav Sachdeva and Neha Rathi, argued that despite the minimum wages in many parts of the country exceeding this wage limit, no revision has been made to the EPF salary ceiling. This has deprived a large number of employees of social security and future savings benefits.

An Outdated Policy
While disposing of the petition, the apex court instructed the petitioner to submit a copy of the order to the central government within two weeks. The government has been asked to make a decision on the matter within four months. The petition argued that in the past 70 years, the wage limit has been revised in an arbitrary manner, with revisions sometimes occurring after intervals of 13-14 years, and without any relation to economic indicators like inflation, minimum wages, or per capita income.

The petition further stated that, due to this inconsistent policy, far fewer employees are benefitting from the EPF scheme today than in the past. In 2022, an EPFO sub-committee recommended raising the wage ceiling and including more employees in the scheme. The central board of EPFO had approved the recommendation, but the government has yet to make a decision on the matter.

Declining Inclusivity of the Scheme
The petition highlighted that, in analyzing the revisions to the wage limit over the past 70 years, it was found that the EPF scheme was initially inclusive in the first 30 years. However, in the past three decades, it has increasingly excluded more employees.