SC asks Centre to decide on EPF wage ceiling revision within 4 months

The Supreme Court has 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) on Monday, 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.

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. Sachdeva said this has deprived the majority of workers of the benefits and protection of the EPFO scheme, which is essentially a social welfare scheme. The petitioner has submitted that those employees who earn more than the wage ceiling are excluded from availing the EPFO scheme.

The plea said that the revision of the wage ceiling over the last 70 years has not been consistent with any of the metrics–minimum pay of the central government employees, income tax exemption limit, annual growth rate in per capita net national income, minimum wages and annual inflation rates. “A statistical analysis of the revision in the wage ceiling over the last 70 years shows that it has not been consistent with any of the above-mentioned metrics. While the wage ceiling currently continues to remain at Rs 15,000, the minimum wages in several parts of the country are much higher. This has led to reduced coverage of the scheme thereby leading to a failure of the objectives of the Act,” it said.