NewDelhi:Inabreathertoemployers,theLabourMinistryhasproposedthatcontributionby

companiestowardstheirworkers'EPFschemeswouldbeaportionof"ContributoryWages"whichwill
notincludehouserentandtravelallowances.
Theconceptof"ContributoryWages"forthepurposeofPFdeductionshasbeenincludedinthe
EmployeesProvidentFundsandMiscellaneousProvisions(Amendment)Bill,2015,whichwillsoonbe
placedbeforetheCabinetforapproval.
"Thebillhasbeenfirmedup.ItwillbesentforCabinetapprovalsothatitcouldbeintroducedinthe
MonsoonsessionofParliament,"aseniorLabourMinistryofficialsaid.
Thefinaldraft,preparedbytheLabourMinistry,issignificantdilutionofconceptofclubbingwages
proposedbythelabourunions.
Whiletheunionswantedthat12percentPFcontributionbytheemployersshouldbeontotaltake
homesalary,theemployerswereopposedtotheideaasitwouldhaveincreasedtheirPFliabilityand
reducedworkers'pay.
ThefinaldrafthasproposedthatPFcontributionmadebyemployerswouldbeaportionofcontributory
wageswhichwillnotincludeHRA,travelallowance,allowancetodefrayspecialexpensesentailedon
workersbynaturejob,gratuity.
AsperthebilltheContributingWagesmeansallremunerationpaidorpayabletoanemployeeinterms
ofthecontractofemployment,expressorimplied,andwillincludeanypaymenttoanemployeein
respectofanyperiodofauthorisedleave,lockout,strikewhichisnotillegalorlayoffandother
additionalremuneration,ifany,paidatintervalsnotexceedingtwomonths.
TheproposedBillalsoprovidesonetimeoptiontoEPFOsubscriberstochoosebetweenEPFandNew
PensionScheme.
FinanceMinisterArunJaitleyhadmadeannouncementregardingprovidinganoptiontoformalsector
workerstochoosebetweenEPFandNPSinhisbudgetspeech.
AtpresentformalsectorworkersarecoveredundersocialsecurityschemesrunbyEmployees
ProvidentFundOrganisation(EPFO)aspertheEmployeesProvidentFunds&Miscellaneous
ProvisionsAct1952.
TheproposedSection16BprovidesthatworkersoptingforNPSshallbedeemedtohaveexitedfrom
theEmployees?ProvidentFundScheme,Employees'PensionScheme,Employees'DepositLinked
InsuranceSchemeoranyotherschemenotifiedunderthisActfromthedateofsubmissionofthe
application.
Thebillalsoprovidesforadefinitionof'smallestablishment'whichemploylessthan40workers.
Thesefirms'cashinbankorhand,plantandmachineryandofficeequipmentcriticaltofunction,would
beprotectedfromattachmentundertheActforrecoveryofPFduesfor90daysfromdateofissueof
recoverycertificatetothesefirms.
Thedraftbillalsoprovidesflexibilitytoincreaseordecreasethemandatorycontributionof8.33per
centofbasicwagestowardemployees'pensionscheme.PTIFirstPublished:Wednesday,May20,
2015,23:20