Wednesday, 28 August 2019

Domestic help, Drivers others may get PF benefits

In order to widen the social security net, India has proposed to introduced provident fund (PF) for the domestic help and other self-employed persons such as drivers, etc. The labour ministry is planning to amend the Employees'
Provident Fund and Miscellaneous Provident Act so as to empower the government to notify the rate and duration of contributions for any class of employees.

It may be noted that this move is followed by the Pradhan Mantri Shram Yogi Maan Dhan pension scheme launched for the workers from unorganized sector. According to a senior government official, the aim is to allow rates of contribution for certain classes of employees which should be lower than the mandatory 12 per cent and in case of any need, the exemption of employers from any liability as well, as per a report in a financial daily.

This provision will empower the government to fix rates for a large number of workers from the unorganised sector such as domestic help, drivers, or the self-employed, as cited in the newspaper report. On the condition of anonymity, the official told, "Besides, the government may notify whether in these cases the employer is liable to contribute or not." 

The labour ministry’s draft amendment to the Act proposes that the Centre "specify rates of contribution and the period for which such rates shall apply for any class of employees."

A preliminary draft of the EPF and MP (Amendment) Bill, 2019, dated August 23 has sought suggestings and comments until September 22, 2019.

"With the change in the industrial and economic scenario of the country leading to increased mobility of labour and outsourcing of services, need has been felt for introducing some amendments in the provisions of the Act," the labour ministry said in a brief note sent with the proposed draft amendment. 

The subscribers may be given the choice of switching between the EPFO and the NPS (National Pension Scheme) and those earning below a certain threshold can choose not to contribute to provident fund without impacting the employer's contribution. “This flexibility will enable modification of rates of contribution depending on various factors like age, income, gender,” it said. 

According to the draft, the amendment seeks to stipulate that allowances paid above 50 per cent or as a notified percentage of all remuneration be included as wages, as per the draft.

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