New Delhi: The Supreme Court has asked the Centre to consider taking a decision within four months on revising the wage ceiling under the Employees Provident Fund Scheme, which has remained unchanged for the past 11 years.
A bench comprising Justices J K Maheshwari and A S Chandurkar passed the order while hearing a petition filed by activist Naveen Prakash Nautiyal. The plea raised concerns that the Employees’ Provident Fund Organisation currently excludes employees earning more than Rs 15,000 per month from mandatory coverage, despite the scheme being intended as a key social security measure for organised sector workers.
Appearing for the petitioner, advocates Pranav Sachdeva and Neha Rathi told the court that the wage ceiling has not been revised for over a decade, even though minimum wages notified by the central government and several states are now higher than the existing EPFO limit of Rs 15,000 per month. Sachdeva submitted that this gap has deprived a large section of workers of provident fund benefits and statutory protection under the scheme.
The petition argued that employees earning above the prescribed ceiling are automatically excluded from EPFO coverage, undermining the objective of the Employees’ Provident Fund Scheme, 1952, which was framed under the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952. Nautiyal said the plea sought enforcement of fundamental rights under Articles 14 and 21 of the Constitution, alleging arbitrary and irregular revision of the wage ceiling.
According to the petition, revisions to the wage ceiling over the decades have been inconsistent, with gaps of 13 to 14 years at times, and without any fixed periodicity or linkage to economic indicators such as inflation, minimum wages, per capita income or the consumer price index. It stated that this approach has gradually excluded large sections of the workforce, contrary to the scheme’s stated aim of providing social security to employees in the organised sector. The plea referred to findings of the Public Accounts Committee of the 16th Lok Sabha and a 2022 report of an EPFO sub-committee, both of which recommended periodic and rational revision of the wage ceiling. It noted that these recommendations were approved by the Central Board of Trustees of EPFO in July 2022 but have yet to be acted upon by the central government.
The petition also cited a statistical analysis of wage ceiling revisions over the past 70 years, claiming they have not aligned with benchmarks such as minimum pay of central government employees, income tax exemption limits, growth in per capita net national income, minimum wages or inflation trends. While the ceiling remains at Rs 15,000, minimum wages in several regions are significantly higher, leading to reduced coverage and what the plea described as a failure to meet the objectives of the law.
It further claimed that the EPFO framework has shifted from being inclusive in its initial three decades to exclusionary over the past 30 years, as reflected in the disparity between the number of workers covered at inception and those covered currently. The petition also highlighted a 2022 report by the EPFO’s Sub-Committee on Enhancing Coverage and Managing Related Litigation, which recommended lowering the coverage threshold, raising the wage ceiling and enrolling all employees as EPF members up to that limit. Disposing of the plea, the court directed Nautiyal to submit a detailed representation to the central government within two weeks, along with a copy of the order. The bench said the Centre should consider and decide on the representation within four months.