Employee Provident Fund (EPF) Current Affairs - 2020
On December 11, 2019, the social security code bill was introduced in Lok Sabha. The bill paves way for universalization of social security of 50 crore workers in the country.
Key Features of the bill
The bill proposes setting up of a social security fund to fulfill benefits such as medical cover, pension, death and disablement benefits including gig workers. This will help to tap the corporate social responsibility fund and divert it towards the unorganized sector.
The bill will provide options of reducing the provident fund contribution of the employees. It is currently 12% of basic salary. This will increase their take-home payment.
The bill also makes the fixed-term contract workers eligible for gratuity. Currently under the Payment of Gratuity Act, 1972, workers are not entitled to gratuity before the completion of 5 years.
The bill is completely based on the Drafts Security Code.
The bill intends to merge 8 laws and to support the unorganized workers as that mentioned in the code.
Need for the bill
India leads in global gig economy contributing 24% of online labor market in the world! The data was provided by the Oxford Internet Institute. Apart from internet, being the second most populous country in the world, India has maximum number of unorganized employees.
Tags: Employee Provident Fund (EPF) • Payment of Gratuity Act 1972 • Social Security • Social Security Laws • universal social security code
The Employees’ Provident Fund Organisation (EPFO) has inked an agreement with four private banks and Bank of Baroda for the purpose of collection of provident fund dues from the employers and payments to its subscribers.
This is the first time the EPFO has roped in private banks, namely, ICICI Bank, HDFC Bank, Axis Bank and Kotak Mahindra Bank. Earlier, the EPFO was making use of the services of only the state-run banks. This move of the EPFO will help the organisation to save nearly Rs 300 crore per year as the five banks have agreed to zero transaction charges.
Already the EPFO had tied up with five other banks. The five other banks are State Bank of India (SBI), Punjab National Bank, Allahabad Bank, Indian Bank and Union Bank of India. The latest agreement will now authorise 10 banks to collect provident fund contribution and make payment to the employees. Every year, the EPFO settles around 1.16 crore claims and collects ₹75,000 crores from establishments under the EPF Act.
Employee Provident Fund (EPF)
The Employee Provident Fund (EPF) is a retirement benefit applicable only to salaried employees. It is a fund to which both the employee and employer contribute fixed amount (percent) of the former’s basic salary amount each month. This percentage is pre-set by the government. At present, the entire EPF amount is tax-free at the time of withdrawal if the employee has completed five years of continuous service.
EPFO is a statutory body of Union Government that comes under the aegis of Ministry of Labour and Employment. It is one of the largest social security organisations in India in terms volume of financial transactions undertaken and the number of covered beneficiaries. Its headquarters is located in New Delhi. The main functions of the EPFO: Administers a compulsory contributory Provident Fund Scheme (1952), Pension Scheme (1995) and Insurance Scheme (1976).
Tags: Current Affairs - 2017 • Employee Provident Fund (EPF) • Employees’ Provident Fund Organisation (EPFO) • Ministry of Labour and Employment • National