The Government’s wage subsidy scheme, which was to end today, that is, June 30, has now been extended till March 31, 2022. The scheme has been extended through the Employees’ Provident Fund Organisation (EPFO), with the aim of giving a boost to job creation in the economy. This will also increase the take-home salaries of new employees or those who are returning to the active workforce after being laid off during the pandemic. The move will also reduce the employee cost burden for employers, with the monthly EPF dues being borne by the Government.
In effect, all employees with a salary of not more than Rs 15,000 per month who have joined or will be joining between 1 October 2020 and 31 March 2022, shall be eligible for EPF subsidy from the Government, under the scheme that was announced last November.
The Government will pay 24 per cent of EPF dues — 12 per cent each that would otherwise have been paid by employees and employers — of those workers who join work during this period, for two years from the date of joining. Every month, workers pay 12 per cent of their basic salary and part of some allowances as statutory EPF deductions. The employers match that amount as their contribution. By subsidising this amount, the Government of India is trying to help both the employees and employers save money.
This subsidy can be availed by all companies employing up to 1,000 workers. Where the workforce strength exceeds 1,000, the Government will pay only the 12 per cent share of the employees. The objective is to encourage employers to create new jobs and sources of livelihood, especially at a time when unemployment in the country is high.