The Supreme Court has directed the Central government and the Employees’ Provident Fund Organisation (EPFO) to decide on revising the wage ceiling under the Employees’ Provident Fund Scheme (EPFS) within four months. The wage limit, which has remained unchanged for the past 11 years, has been criticised for excluding a significant portion of employees from EPF coverage.
The order was issued by a Bench of Justices J.K. Maheshwari and Atul S. Chandurkar while hearing a public interest litigation (PIL) filed by Dr Naveen Prakash Nautiyal. The petition argued that the existing wage ceiling of Rs 15,000 per month is arbitrary, irrational, and disconnected from inflation, minimum wages, and per capita income growth. The Bench permitted the petitioner to submit a fresh representation within two weeks, accompanied by a copy of the court’s order, which the government and EPFO must decide upon within four months.
The plea highlighted that while minimum wages across the country have steadily increased, the EPF wage ceiling has remained frozen since September 2014, preventing employees earning slightly above Rs 15,000 per month from enrolling in the scheme. According to the petition, this approach undermines the purpose of providing social security to workers in the organised sector.
The PIL also cited the 34th report of the Public Accounts Committee of the 16th Lok Sabha, which noted that failure to cover even lower-income employees defeats the objective of social security schemes. The Committee recommended periodic revision of the wage ceiling every three to five years to adjust for inflation.
Further, the petition referred to EPFO’s own Sub-Committee on Enhancing Coverage and Managing Related Litigation, which in 2022 recommended raising the wage ceiling and enrolling all employees up to the revised limit. While the Central Board of Trustees (EPF) approved these recommendations in July 2022, the Centre has not yet implemented them.
The Supreme Court’s directive aims to address the prolonged stagnation in the EPF wage ceiling and expand coverage to a wider workforce. The decision is expected to benefit thousands of employees who have been excluded from EPF contributions due to the outdated limit. Officials from both the Central government and EPFO are now required to review the proposal, consider the recommendations, and implement an appropriate wage ceiling to ensure social security benefits reach more workers in the organised sector.
The development marks a significant step towards enhancing employee welfare and aligning the EPF scheme with contemporary wage trends and economic realities.
