EPFO: The Employees’ Provident Fund Organization (EPFO) has busted a common myth on employees’ enrolment scheme.
For years, many employers have misunderstood an important of the Employees’ Enrolment Scheme when it comes to the required contribution amount for securing relief under the program.
Many are of the view that an employer is required to pay ₹100 per eligible employee. However, this is far from the truth. The reality is far more employer-friendly and far simpler.
EPFO: Origin of the Employees’ Enrolment Scheme
The Employees’ Enrolment Scheme was introduced with an aim to encourage employers to bring the section of unregistered workers under the formal framework of social security benefits. It provides compliance and financial relief for businesses that register voluntarily their employees under the Employees’ Provident Fund (EPF).
Contrary to the common myth, an employer is not required to pay ₹100 for each eligible employee. Instead, the employer is required to make a one-time lump-sum payment of ₹100 per establishment for the applicable past period. This single payment is sufficient to unlock the relief that the scheme offers.
This clarification matters for many micro, small and medium-sized enterprises that operate with tight margins. The misconception of having to make a payment of ₹100 per employee could significantly inflate the perceived cost, discouraging compliance.
Employers can ensure compliance with labour regulations while also winning employee trust by timely enrolling all eligible employees under the EPF through this scheme.
When compliance becomes simpler, everyone wins – the employer, the employee, and the economy.
