EPFO EDLI Rules Clarification: Holidays And Weekends No Longer ‘Breaks In Service’

The Employee’s Provident Fund Organisation (EPFO) has issued a clarification regarding EDLI - Employees' Deposit Linked Insurance (EDLI) Scheme, 1976. The scheme (EDLI) provides death cover for a minimum of Rs 2.5 lakh and a maximum of Rs 7 lakh to employees in case of death during service. Unlike the employee provident fund (EPF), ELDI doesn’t require contributions from employees. Only employers contribute to the scheme, which is stipulated at 0.50 per cent of the salary (basic and dearness allowance).

The clarification dated December 17, 2025, has been issued in response to the observation that many death claims were being rejected due to minor gaps in employment history. EPFO noted that the incidences where the beneficiaries were denied insurance because of a public holiday or weekend occurred when transitioning between jobs. It shares that short gaps were categorised as ‘break in service’, where full benefits were denied to employees’ families even if the employee had worked for more than 12 months.

The notification clarifies, “The Saturdays, Sundays or any declared weekly off in the last or present establishment, National holiday, Gazetted holiday, State holiday and Restricted holiday shall not be treated as break in service and the service shall be treated as continuous.”

It clarifies that as long as the holidays or weekends are the only days separating the date of exit from one organisation and the date of joining the other organisation, it won’t be considered as a break. It means if an employee leaves a job on a Friday and joins another company on Monday, the service period would be considered uninterrupted.

Notably, on July 18, 2025, the Ministry of Labour and Employment issued a gazette notification to remove irregularities in providing the assured benefits. As per it, changes were made in paragraph 22 of the EDLI, 1976. This paragraph is about the scales of assurance benefit and the maximum average balance to be maintained by an employee.  

The latest notification reiterates the changes introduced in Para 22, in July 2025, in this regard:

• The minimum benefit payable to the dependents or the legal heirs of employees is Rs 50,000, even if they have not worked continuously for 12 months before the month of their death and their average provident fund (PF) balance is less than RS 50,000.

• The members who die within six months of their last contribution are covered for the benefits, provided that they remained on the company’s roll. The dependents or legal heirs of such employees will be eligible for the insurance amount.  

• Further, those employees who have worked in more than one establishment where there is a gap of up to 60 days before they joined the other company would be considered as continuous service. In short, the break in service of up to 60 days will not be considered as a break to calculate 12 months of continuous service.

This clarification is meant to streamline claim settlement under EDLI and ensure timely financial support to the dependents or legal heirs of deceased employees.