Summary of this article
Supreme Court orders Centre to decide EPFO wage ceiling hike within four months.
Rs 15,000 cap remained unchanged for last 11 years.
As there is no fixed revision formula, EPFO sub-committee urged periodic review.
The Supreme Court on Monday asked the Centre to consider taking a decision within four months on the revision of wage ceiling for the Employees Provident Fund Scheme (EPFO) which has not been revised in the last 11 years.
A bench of Justices J K Maheshwari and A S Chandurkar passed the order on a plea filed by activist Naveen Prakash Nautiyal claiming that the Employees Provident Fund Organisation (EPFO), which administers social security schemes for employees, currently excludes from coverage those whose wages exceed Rs 15,000 per month.
Advocates Pranav Sachdeva and Neha Rathi, appearing for the petitioner, said the wage revision has not taken place in over a decade despite the fact that the minimum wage notified by the central government and by various states is more than the EPFO wage ceiling of Rs 15,000 per month.
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 bench disposed of the plea filed by Nautiyal and asked him to make a representation to the central government within two weeks along with a copy of the order which will be decided by the central government within four months.
Nautiyal's plea said it is seeking enforcement of fundamental rights under Articles 14 and 21 and for directions regarding the arbitrary and irregular revision of the wage ceiling under the Employees' Provident Fund Scheme, 1952, framed under the Employees' Provident Fund and Miscellaneous Provisions Act, 1952.
It said the wage ceiling has historically been revised inconsistently, sometimes after 13-14 years, without any fixed periodicity or linkage to relevant economic indicators such as inflation, minimum wages, per capita income or consumer price index.
"This erratic approach has resulted in the exclusion of large sections of the workforce, contrary to the object of providing social security to employees in the organised sector. The Public Accounts Committee of the 16th Lok Sabha and the EPFO's own Sub-Committee (2022) have both recommended periodic and rational revision of the ceiling, but despite approval by the Central Board (EPF) in July 2022, the Central Government has not acted upon these recommendations," it said.
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.
The petition further said that the statistical analysis of the revision in the wage ceiling over the years would show that it has undergone a marked shift from being an inclusive framework during the initial 30 years to an exclusionary one in the past three decades.
"This is clearly reflected in the significant disparity between the number of workmen covered by the scheme at the time of its inception and the substantially reduced number of workmen covered by the scheme presently," it added.
It further said that the EPFO's 'Sub-Committee on Enhancing Coverage and Managing Related Litigation' submitted a report in 2022 recommending reducing the coverage threshold, enhancing the wage ceiling and enrolling all employees as EPF members up to the wage ceiling.
"The said recommendation was approved by the Central Board (EPF) in July 2022. Recommendations of the Central Board (EPF) are pending consideration with the Central government," it said.
