On 26th March 2020, Union Finance Minister Ms. Nirmala Sitharaman while unveiling a comprehensive relief package amounting to INR 1.7 lakh crores in a bid to cushion the low-income group and marginalized people from the impact of the pandemic Covid-19 lockdown and its consequential economic disruption, also announced some relief to workers and employers in the organized sector.
Under the package, the Union Government will pay both employer and employee’s contribution (12 percent each), put together 24 percent, towards the Employee Provident Fund (EPF) for the next 3 (three) months. However, the move will benefit and cover only those establishments having upto 100 employees, of which not less than 90 percent earns less than INR 15,000/- monthly.
The Union Government further announced that it will amend the EPF scheme regulation to include pandemic as the reason to allow the Employees’ Provident Fund Organization (EPFO) subscribers to withdraw non-refundable advance of upto 75 percent of the outstanding amount or 3 (three) months wages, whichever is lower. Currently, subscribers of EPFO can withdraw non-refundable advances from their accounts under various terms and conditions, including for specified purposes such as housing, marriage, education etc.
Sitharaman said the PF contribution decision has been taken to ensure that employees’ EPF continuity is not lost, and the move will benefit over 4 crore workers in the organized sector.