Provident Fund: No change in EPF Act; Can small firm workers get PF benefit?

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Updated: January 01, 2020 6:35 PM

EPF rules 2020: As per current rules, employees of an establishment, which doesn't have 20 or more employees, can still join the Employee Provident Fund scheme voluntarily.

EPF rules 2020Check how employees of firms with less than 20 staff can join EPF.

Employee Provident Fund Rules 2020: The Central government has denied reports that claimed establishments having 10 or more employees may be covered under the Employees’ Provident Funds and Miscellaneous Provisions (EPF and MP) Act. The current threshold for EPF Act applicability is 20 or more employees. The statement by the Ministry of Labour and Employment came in response to some reports that claimed the government may bring the applicability threshold of EPF and MP Act down from 20 or more to 10 or more employees.

An official statement of the government said on Tuesday: “Ministry of Labour and Employment denies the media reports published in some newspapers today that the applicability threshold has been brought down from present establishment with 20 or more employees to 10 or more employees for the purpose of application of Employees Provident Fund and Miscellaneous Provisions Act 1952 (EPF & MP Act).”

The statement further said, “The reports said that new rules of Employees Provident Fund will apply from January 01, 2020 and under the new rules establishments having 10 or more employees will be covered under the said Act.”

“It is clarified that there is no change in the threshold for application of the EPF & MP Act and there is no such proposal in the Ministry at present,” it added.

WATCH VIDEO | How To Withdraw PF Online

Voluntary option still available

As per current rules, employees of an establishment, which doesn’t have 20 or more employees, can still join the Employee Provident Fund scheme voluntarily. EPFO explains on its official website how employees of such establishments can join EPF. “The majority of employees and the employer can voluntarily opt for joining the Scheme as per provisions of Section-1(4) of the Act (Voluntary Coverage),” EPFO says.

Section 1 (4) of EPF Act says, “…where it appears to the Central Provident Fund Commissioner, whether on an application made to him in this behalf or otherwise, that the employer and the majority of employees in relation to any establishment have agreed that the provisions of this Act should be made applicable to the establishment, he may, by notification in the Official Gazette, apply the provisions of this Act to that establishment on and from the date of such agreement or from any subsequent date specified in such agreement.”

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