Gurgaon: The city’s Employees’ Provident Fund Organisation (EPFO) membership may go up about 14%. In other words, nearly three lakh more workers in the city could come under mandatory social security coverage. The estimated three lakh additional members would be equivalent to about one in every seven workers currently contributing to EPFO in the city.Last week, Centre raised the wage ceiling for compulsory EPFO coverage from Rs 15,000 to Rs 25,000 a month. Regional provident fund commissioner (Gurgaon East) Dr Archana Janoo said, “The revision would bring a large number of employees drawing between Rs 15,000 and Rs 25,000 a month within mandatory EPFO coverage. The move will give newly covered workers access to provident fund savings as well as pension and insurance-linked benefits, subject to the applicable scheme provisions.”The wage ceiling has been designed to make social security mandatory only for lower-income and mid-skilled workers who need statutory protection the most. The impact of the higher ceiling could extend well beyond traditional factory employment to the city’s large service and commercial workforce. Consider this: EPFO’s city profile lists expert services, trading and commercial establishments, electrical/mechanical/general engineering products, and building and construction among the city’s leading covered industry categories.The local estimate, provided by EPFO’s Gurgaon East office, assumes significance because the city already accounts for a disproportionately large share of Haryana’s formal workforce covered by the retirement fund body. EPFO’s state profile shows the city had 21.6 lakh contributing members across 10,800 contributing establishments, against Haryana’s 37.1 lakh members and 33,755 establishments. That means the city accounted for nearly 58% of the state’s contributing EPFO members and about 32% of its establishments.At the national level, Centre expects more than 51 lakh additional employees to enter mandatory EPFO coverage following the revision, making the city estimate equivalent to nearly 6% of the projected national additions. The significance for the city stems from the character of its employment economy. The administration describes the city as Haryana’s industrial and financial centre and an IT and BPO hub, with the Gurgaon-Manesar-Bawal belt having emerged as a major automobile and manufacturing cluster. The city also has a large presence of multinational companies, software companies and service-sector businesses.For the city, the change comes at a time when the city has continued to attract jobs across manufacturing, IT/ITeS, financial and professional services, logistics, retail and construction. NITI Aayog has identified the city as one of India’s major IT/ITeS hubs and said its position could be leveraged to generate jobs in fintech and professional services. The revision is particularly relevant for employees entering formal employment in the Rs 15,000-Rs 25,000 monthly wage band.
