THEBUSINESSBYES
BUREAU
NEW
DELHI, SEPTEMBER 16, 2026
The Union Cabinet on
Wednesday approved a hike in the statutory wage ceiling for mandatory coverage
under the Employees’ Provident Fund Organisation (EPFO) from Rs 15,000 to Rs
25,000 per month, a move aimed at bringing a larger number of workers under the
country’s formal social security framework.
The enhanced ceiling
will come into effect from September 17, coinciding with Vishwakarma Jayanti
and Sewa Divas, Union Labour and Employment Minister Mansukh Mandaviya
announced at a press briefing here.
Describing the
decision as an important step towards strengthening social security, Mandaviya
said the revision would enable more employees to access provident fund savings,
pension and insurance benefits under applicable EPFO schemes.
The wage ceiling had
remained unchanged at Rs 15,000 since September 2014 despite increases in
wages, minimum wages and living costs, the minister said.
Under the revised
framework, employees drawing between Rs 15,000 and Rs 25,000 a month will come
within the ambit of mandatory EPFO coverage, subject to applicable statutory
provisions. The move is expected to significantly expand the reach of formal
social security among workers.
The enhanced coverage
will provide eligible workers access to the three major components administered
by EPFO -- Employees’ Provident Fund (EPF), Employees’ Pension Scheme (EPS) and
Employees’ Deposit Linked Insurance Scheme (EDLI), strengthening retirement
savings, pension protection and insurance-linked security.
Mandaviya said the
decision would further the government’s commitment to extending social security
to workers under the Labour Codes and give an impetus to formalisation of
employment.
The measure is also
expected to support worker retention and workforce stability by providing
employees greater financial security, while enabling employers to build a more
secure and stable workforce.
The proposal followed
detailed inter-ministerial consultations and was recommended by the Expenditure
Finance Committee at its meeting on June 16, 2026.
The annual government expenditure arising from the enhanced ceiling is estimated at around Rs 11,339 crore, compared with existing annual budgetary support of about Rs 10,250 crore. The estimated expenditure over five years is approximately Rs 56,696 crore.
The Labour Ministry and EPFO will now undertake the required statutory and administrative measures to implement the decision.
