Atmanirbhar Bharat 3.0: Govt to bear EPF burden of newly hired low-wage workers

Under the Atmanirbhar Bharat Rozgar Yojana, the central government will pay the EPF contributions of all new employees with monthly salary of less than Rs 15,000, hired between 1 October 2020 and 30 June 2021, for the next two years

New Delhi: In order to incentivise job creation in the industry, the central government on Thursday rolled out the Atmanirbhar Bharat Rozgar Yojana as part of the third set of stimulus package announced to deal with the coronavirus-induced stress in the economy.

Under the scheme, all Employees' Provident Fund Organisation (EPFO)-registered organisations that hire new employees from 1 October 2020 to 30 June 2021 will be entitled to certain benefits.

For establishments with up to 1,000 employees, the central government will provide subsidy for two years with respect to the employee’s EPF contribution (12% of wages) and employer’s EPF contribution (12% of wages) totalling 24% of wages for new workers hired on monthly salary of less than Rs 15,000 per month.

For establishments with more than 1,000 employees, the central government will provide for only employee’s EPF contribution (12% of wages) of all new workers with salary of less than Rs 15,000 per month.

The subsidy support will get credited upfront in the Aadhaar-seeded EPFO accounts.

Union finance minister Nirmala Sitharaman in a press briefing said: “The scheme will be applicable to anyone getting employment for the first time. Even those who lost their job between 1 March 2020 and 30 September 2020 (due to the Covid-19 pandemic) will be counted as a new employee.”

Also, the establishments need to add a minimum of 2 new employees if their total workforce strength is up to 50 as of September 2020. If their workforce is above 50, they need to add a minimum of 5 new employees to be eligible for the scheme.