The government's move to hike the minimum wage ceiling for the mandatory social security net to Rs 25,000 from Rs 15000 has drawn criticism from a trade union. The All India Trade Union Congress (AITUC) has rejected the decision to revise the monthly wage ceiling for coverage under EPFO's social security schemes to Rs 25,000, saying the hike is "too little and too late". The Union demands raising the ceiling to Rs 30,000, saying it would include deserving sections of employees.
Why The Trade Union Criticises EPFO Wage Ceiling Hike
AITUC said that the increase from Rs 15,000 to Rs 25,000 comes after a 12-year gap, as the ceiling was last revised in September 2014.
Substantial rises in wages, prices, and the cost of living since 2014 render the hike a belated and inadequate response.
Trade unions and employee representatives repeatedly pressed for this enhancement—including in Parliament in 2022 and through a specific EPFO Central Board proposal in February 2024—which the government previously ignored.
The delayed revision previously deprived millions of workers earning above Rs 15,000 of mandatory EPFO coverage.1
AITUC argues that the ceiling should be raised further to Rs 30,000 to adequately reflect current earnings, inflation, and the cost of living.
Unions Were Demanding Hike For Many Years
The union said it has repeatedly raised demands for an increase in the wage ceiling with the government and the EPFO. The wage committee said it has formally tabled a growing demand for an increase in the wage ceiling by Rs 15,000 in 2022 in Parliament.
The AITUC, in a statement, said the Union Cabinet's decision to increase the EPFO wage ceiling from Rs 15,000 to Rs 25,000 after a gap of 12 years was a belated response to the long-standing demands of the trade unions.
The ceiling was last revised in September 2014. Since then, it is being argued that wages, prices and cost of living have increased significantly.
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The employee representatives on the EPFO central board had pressed for an increase in the wage ceiling to Rs 25,000, including a specific proposal, in February 2024, the statement said. However, he pointed out that the government has ignored and denied mandatory EPFO coverage to lakhs of workers earning over Rs 15,000 per month.
Therefore, it is impossible to welcome the current decision as a timely measure or an appropriate measure in terms of the ceiling, it said.
Rs 25,000 Wage Ceiling Is Not Enough: AITUC
The trade body argued that Rs. 25,000 is not an appropriate ceiling. It emphasised that any social security should be commensurate with the earnings of workers, and the benefit of expansion of social security should not be at the cost of a reduced monthly pay packet.
The trade body also highlighted that the minimum wage, i.e. the real wage, should evolve steadily in line with inflation and the cost of living.
"This revision is therefore too little and too late. AITUC demands that the ceiling may be raised to Rs 30,000 to include deserving sections of employees," it stated.
The employer's statutory EPFO share shall be paid in addition to the employee's CTC (Cost to Company) and shall not be deducted or adjusted from the agreed and prevailing wages of the employee.
Government increases wage limit
The Union Cabinet on Wednesday decided to increase the monthly wage limit for mandatory coverage under the Employees' Provident Fund Organisation (EPFO) from Rs. 15,000 to Rs. 25,000.
(With input from PTI)