The Employees’ Provident Fund Organisation (EPFO) has clarified that weekends and holidays that fall between the time of exit of an employee from an organisation and the entry into a new organisation cannot be considered a break in service for the purpose of insurance claim.
A circular was issued to this effect by the EPFO which will benefit the families of employees covered under the Employees’ Deposit Linked Insurance (EDLI) Scheme. The circular clearly outlines what ‘continuous service’ truly means for the calculation of EDLI benefits.
In many instances, claims have faced rejection or employees have failed to received full amount owing to the grey areas or lack of clarity of terms such as ‘break in service’ .
It was realised by the EPFO that in some cases, the employee was not granted EDLI benefits despite having completed over 12 months of service in total across several organisations. This happened simply because Saturday and Sunday in the period between getting relieved from one firm and joining another were considered as a gap in service.
As per the latest clarification now, Saturdays, Sundays or any declared weekly holidays in the employee’s last or present place of work, national holidays, gazetted holidays, state holidays and restricted holidays cannot be considered as a break in service.
Simply put, if an employee leaves a job on a Friday and joins a new one on Monday, the weekend in between will not have any impact on his EDLI.