EPFO system hoodwinked by 9 lakh employees

About 80,000 companies availed the monetary assistance under PMRPY, despite being non-eligible.


Almost 80,000 companies have been found to have been wrongly availing the benefits of the Pradhan Mantri Rojgar Protsahan Yojana (PMRPY), aimed at bringing new employees into the formal economy. As a result, about nine lakh employees benefited from this job formalisation scheme even though they were not actually eligible, causing a loss of about Rs 300 crore to the national treasury.

As per the PMRPY scheme, which was launched in August, 2016, the employers registered with the Employees’ Provident Fund Organisation (EPFO) are given incentives for creating jobs, in the form of payment of full employers’ contribution to the Employee Pension Scheme (EPS) and Employees’ Provident Fund (EPF). Only new and regular employees who were given jobs post 1 April, 2016 should have been eligible for the benefits. Also, in order to avail the benefits, the eligible employees should not have been getting wages more than Rs 15,000 per month.

The central government was contributing 8.33 per cent towards EPS on behalf of the employers for new job creation under the scheme.

However, investigations revealed that over 8,98,576 non-eligible employees working with 80,000 companies were availing the benefits of the scheme till 16 July, 2019. While it is possible that the concerned employers were not fully aware of the terms and conditions of the scheme, the employers do hold the Government responsible for not putting in place proper monitoring systems to avoid such errors.

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