New Delhi: The Supreme Court on Monday directed the Central government and the Employees’ Provident Fund Organisation (EPFO) to decide, within four months, on revising the wage ceiling under the Employees’ Provident Fund Scheme (EPFS), which has remained unchanged for the past 11 years.
A Bench of Justices J.K. Maheshwari and Atul S. Chandurkar passed the directions while hearing a public interest litigation (PIL) highlighting that the stagnant wage ceiling has resulted in a large section of workers being excluded from the ambit of the EPFO, a social welfare scheme intended to provide social security to employees in the organised sector.
Allowing the petitioner to make a fresh representation, the Justice Maheshwari-led Bench permitted the PIL litigant, Dr Naveen Prakash Nautiyal, to submit a detailed representation within two weeks along with a copy of the top court’s order, and directed that it be decided within four months thereafter.
The petition, filed through advocates Pranav Sachdeva and Neha Rathi under Article 32 of the Constitution, contended that the existing wage ceiling of Rs 15,000 per month is “arbitrary and irrational” and has no linkage with inflation, minimum wages, or growth in per capita income, despite repeated recommendations by expert bodies and Parliamentary committees.
According to the plea, while the minimum wages notified by the Central government and various states have steadily increased over the years, the EPFO wage ceiling has remained frozen since September 2014, leading to the exclusion of employees earning marginally above Rs 15,000 per month from EPF coverage.
“This erratic approach has resulted in exclusion of large sections of the workforce, contrary to the object of providing social security to employees in the organised sector,” the petition stated.
The PIL further highlighted that the Public Accounts Committee of the 16th Lok Sabha, in its 34th report, had observed that if even the lowest rung of workers is not covered by welfare schemes, “the very purpose of having social security schemes is defeated”, and had recommended periodic revision of the wage ceiling every three to five years to offset erosion caused by inflation.
It was also highlighted that the EPFO’s own Sub-Committee on Enhancing Coverage and Managing Related Litigation had, in 2022, recommended enhancement of the wage ceiling and enrolment of all employees as EPF members up to the revised ceiling. However, the recommendations were approved by the Central Board of Trustees (EPF) in July 2022 but are yet to be acted upon by the Centre.