Aatmnirbhar Bharat Abhiyan 3.0
New Incentives for Businesses Covered in PF to Boost Employment
If an establishment has less than 1,000 employees, *24% PF* (12% employee's share and 12% employer's share) shall be paid by the Government for their *new employees* employed on or after 01.10.2020. This benefit shall be for a period of *two years* from the date of employment. If employees are more than 1,000, then only the 12% employee's share shall be paid by the Government. The employer continues to pay their 12% share.
Conditions
- The scheme is for employees with monthly wages less than *Rs.15,000/-*.
- If an establishment has less than 50 employees, a minimum of 2 new employees must be added.
- If you have more than 50 employees, you should employ a minimum of 5 or more new employees.
- "New" means first-time PF registration on or after 01.10.2020.
- Also, if any old employee lost or left their job between 01.03.2020 to 30.09.2020, then on re-employment after 01.10.2020, they shall get the benefit.
- Businesses that are not yet covered in PF but do so now shall get the benefit for *ALL* their employees.
- The scheme is open till 30.06.2021.
- This is a huge incentive by the Government to encourage businesses to add new employees and also to establishments not yet registered with EPFO to do so.
- For example, if an employee earns Rs.14,999/-, then Rs.1,800/- (12% employee share) and Rs.1,800/- (12% employer share), totaling Rs.3,600/- per month, shall be paid by the Government for 2 years.
- Total of 3600 x 24 = Rs.86,400.
- Both employer and employee get a benefit of up to Rs.43,200/- each year for 2 years.
- It means PF shall not be deducted from new eligible employees.
- Ironically, it means that new eligible employees get Rs.1,800/- per month more than existing old employees presently drawing less than Rs.15,000/- wages per month, for 2 years.
- It also means that employees who left on or after 01.03.2020 and rejoin after 01.10.2020 shall get this incentive of up to Rs.1,800/- per month, but if any loyal employee stayed back and continued to work or joined before 01.10.2020, they shall not be eligible for this benefit.
- Nonetheless, it is a grand incentive for new businesses that employ 20 or more employees on or before 30th June 2021.
- It's also a grand incentive for existing businesses not yet covered in PF (employees less than 20) or those who have avoided or evaded PF registration. Till now, the enforcement department of PF would not only recover old PF dues, but they would also recover interest and penalty. But now, there's this huge incentive for such units to get voluntarily covered in PF.
Example
Suppose one is able to add 20 employees, it will mean a benefit of up to Rs.43,200 x 20 x 2 = Rs.17,28,000/- in 2 years. For new employees that one adds till 30.06.2021, each employee shall get an additional benefit of Rs.43,200/- per year. The employees can also get a benefit of 24% of basic wages up to Rs.3,600/- per month as this amount shall be deposited in their PF account by the Government for 2 years.
From India, Telangana
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36New Incentives for Businesses Covered in PF to Boost Employment
If an establishment has less than 1,000 employees, *24% PF* (12% employee's share and 12% employer's share) shall be paid by the Government for their *new employees* employed on or after 01.10.2020. This benefit shall be for a period of *two years* from the date of employment. If employees are more than 1,000, then only the 12% employee's share shall be paid by the Government. The employer continues to pay their 12% share.
Conditions
- The scheme is for employees with monthly wages less than *Rs.15,000/-*.
- If an establishment has less than 50 employees, a minimum of 2 new employees must be added.
- If you have more than 50 employees, you should employ a minimum of 5 or more new employees.
- "New" means first-time PF registration on or after 01.10.2020.
- Also, if any old employee lost or left their job between 01.03.2020 to 30.09.2020, then on re-employment after 01.10.2020, they shall get the benefit.
- Businesses that are not yet covered in PF but do so now shall get the benefit for *ALL* their employees.
- The scheme is open till 30.06.2021.
- This is a huge incentive by the Government to encourage businesses to add new employees and also to establishments not yet registered with EPFO to do so.
- For example, if an employee earns Rs.14,999/-, then Rs.1,800/- (12% employee share) and Rs.1,800/- (12% employer share), totaling Rs.3,600/- per month, shall be paid by the Government for 2 years.
- Total of 3600 x 24 = Rs.86,400.
- Both employer and employee get a benefit of up to Rs.43,200/- each year for 2 years.
- It means PF shall not be deducted from new eligible employees.
- Ironically, it means that new eligible employees get Rs.1,800/- per month more than existing old employees presently drawing less than Rs.15,000/- wages per month, for 2 years.
- It also means that employees who left on or after 01.03.2020 and rejoin after 01.10.2020 shall get this incentive of up to Rs.1,800/- per month, but if any loyal employee stayed back and continued to work or joined before 01.10.2020, they shall not be eligible for this benefit.
- Nonetheless, it is a grand incentive for new businesses that employ 20 or more employees on or before 30th June 2021.
- It's also a grand incentive for existing businesses not yet covered in PF (employees less than 20) or those who have avoided or evaded PF registration. Till now, the enforcement department of PF would not only recover old PF dues, but they would also recover interest and penalty. But now, there's this huge incentive for such units to get voluntarily covered in PF.
Example
Suppose one is able to add 20 employees, it will mean a benefit of up to Rs.43,200 x 20 x 2 = Rs.17,28,000/- in 2 years. For new employees that one adds till 30.06.2021, each employee shall get an additional benefit of Rs.43,200/- per year. The employees can also get a benefit of 24% of basic wages up to Rs.3,600/- per month as this amount shall be deposited in their PF account by the Government for 2 years.
From India, Telangana
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When the industry is struggling with the collapse of manufacturing, sales, and payment crises, and is unable to pay their existing employees, how can one take on more fresh employment? Not only do they have to consider EPF, but they also need to pay salaries first, then ESIC, Profession Tax, Bonus, and other facilities as well.
Atmanirbhar 3.0
In Atmanirbhar 3.0, the gross salary should be 15,000. This means the EPF contribution from both sides would be around 8,000 (basic) * 12% = 960 + 960 (employer) = 1,920. However, the employer's CTC would be much more.
Despite the challenges, we remain hopeful that if the industry can create at least a 1% increase in fresh employment, it would provide support to the workers who lost their jobs during the lockdown and help them survive.
Thank you.
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Atmanirbhar 3.0
In Atmanirbhar 3.0, the gross salary should be 15,000. This means the EPF contribution from both sides would be around 8,000 (basic) * 12% = 960 + 960 (employer) = 1,920. However, the employer's CTC would be much more.
Despite the challenges, we remain hopeful that if the industry can create at least a 1% increase in fresh employment, it would provide support to the workers who lost their jobs during the lockdown and help them survive.
Thank you.
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BENEFITS UNDER EPF.ppt
Benefits under EPF act.docx