Good news! Cabinet extends EPF support for small businesses for 3 months, to benefit 72 lakh employees
The Union Cabinet on Wednesday approved the proposal to extend the scheme for payment of the employer and employee's PF contribution for three months until August, as part of the package announced by the Government under Pradhan Mantri Garib Kalyan Yojana (PMGKY)/ Aatmanirbhar Bharat in the light of COVID-19 Pandemic.
This approval is in addition to the existing scheme for the wage months of March to May approved on April 15. Over 72 lakh employees in 3.67 lakh establishments will be benefitted.
Sitharaman in May had announced the extension of the scheme under the Pradhan Mantri Garib Kalyan Yojana for three months till August, where the government would contribute entire 24 per cent of PF contributions till August, giving relief to 3.67 lakh employers and 72.22 lakh employees.
The salient features of the proposal are as under:
- For the wage months of June, July and August, 2020, the scheme will cover all the establishments having upto 100 employees and 90% of such employees earning less than Rs. 15,000 monthly wage.
- About 72.22 lakh workers working in 3.67 lakh establishments will be benefited and would likely to continue on their payrolls despite disruptions.
- Government will provide Budgetary Support of Rs.4800 crore for the year 2020-21 for this purpose.
- The beneficiaries entitled for 12% employers' contribution for the months of June to August, 2020 under Pradhan Mantri Rozgar Protsahan Yojana (PMRPY) will be excluded to prevent overlapping benefit.
- Due to prolonged lockdown, it was felt that businesses continue to face financial crisis as they get back to work. Therefore, the Hon'ble FM, as part of Aatmanirbhar Bharat, announced on 13.5.2020 that the EPF support for business and workers will be extended by another 3 months viz. for the wage months of June, July, and August, 2020.
