In order to encourage employment in the country, the government has come up with a scheme where the govt. will contribute to the employee’s provident fund account. Here are the details.
Getting a job today is not as easy as it was before. Being unemployed could mean breaking your Fixed Deposits or selling your Mutual Funds to survive. The Government understands this and in order to encourage employment has come up with a scheme called the Pradhan Mantri Rojgar Protsahan Yojana (PMRPY).
Under this scheme, the government will contribute towards the employee’s provident fund for the first three years of employment. Through this scheme, the government hopes to create 1 crore new jobs as it encourages employers to recruit more employees. The scheme will also help those who are in the unorganised sector with no social security benefits to the organised sector.
Who are covered?
Under the PMRPY scheme, new employees will be those employees earning less than or equal to Rs. 15,000 per month. These employees should not be working in any establishment registered with the Employee Provident Fund Organisation (EPFO) in the past. They shouldn’t have had a Universal Account Number (UAN) prior to 1st April, 2016.
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The details of the employee will be verified using the database of establishments and member details available with EPFO. The employee should be remain employed with any EPFO registered establishment. It is not necessary that they should be with the same organisation that they joined. All new eligible employees will be covered under the PMRPY scheme till 2019 – 20.
Which firms can avail this scheme?
Also, not all companies can avail this scheme. Only those establishments registered with the EPFO can register their employees under the PMRPY scheme. The companies should also have a Labour Identification Number (LIN) allotted to them under the Shram Suvidha Portal (https://shramsuvidha.gov.in). The EPFO will use the LIN as the primary reference number for all communications that will be made under the PMRPY Scheme.
Any company that wants to register their employees under the scheme should have added new employees to its establishment. The company will get the benefit of 8.33% EPF contribution paid by the government for eligible new employees. This will be for 3 years from the date of the employee acquiring a new UAN or 9th August 2016, whichever is later.
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The contribution of 8.33% will be paid by the government after the employer has remitted the 3.67% to the EPF for the new employees each month. To avoid any penalty for the EPF contribution, the employer is advised by the government to submit the PMRPY online form early on in the month, preferably by the 10th of the following month.
Companies applying for the PMRPY scheme will be responsible for the information that they upload at any time. If it is found that the information submitted by them is incorrect or false, it will be assumed by the EPFO that the EPF contribution has not been made for these employees and the company will have to pay the dues and penalties as specified under the provisions of The Employees’ Provident Fund Scheme, 1952.
Who get special benefits?
In the case of the textile (apparel and made-ups) sector, the employers will be eligible to get the 3.67% EPF contribution paid by the Government in addition to the 8.33% contribution under the scheme. This benefit can be availed of by the textile sector companies that deal with the production of clothes (in particular those under NIC Codes 1410 and 1430).
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The payment of the 12% EPF contribution by the government will be made only after the company has credited the employee’s 12% EPF contribution in the EPFO account.
If you are getting your first job, you can ask your employer to register you for the PMRPY scheme. Even though the EPF is a good way to save for your retirement, you should invest in other avenues such as Fixed Deposits and Mutual Funds. Don’t have much to invest? You can still consider investing in Mutual Funds through Systematic Investment Plans (SIP). You can start investing with just Rs. 500. What are you waiting for?