Supreme Court allows petitioner to approach Centre on timely revision of EPFO wage ceiling

The Supreme Court on Monday (January 5, 2025) allowed a petitioner to approach the Centre with a representation on the revision of the wage ceiling for Employees Provident Fund Scheme (EPFO).

A Bench headed by Justice J.K. Maheshwari permitted petitioner Naveen Prakash Nautiyal, an academician and activist, represented by advocates Pranav Sachdeva and Neha Rathi, to file a representation with the government in two weeks, along with a copy of Monday’s (January 5) court order. The government was asked to take a call in four months thereafter.

The petitioner argued that the EPFO had not been revised even though the minimum wage notified by the Central Government and by various States was more than the EPFO wage ceiling of ₹15,000 per month. This anomaly has resulted in depriving a majority of workers of the benefits and protection of the EPFO scheme, a welfare measure.

“The EPFO, which administers social security schemes for employees, currently excludes from coverage those whose wages exceed ₹15,000 per month. However, the wage ceiling has historically been revised inconsistently, sometimes after 13-14 years, without any fixed periodicity or linkage to relevant economic indicators such as inflation, minimum wages, per capita income or consumer price index,” the petition said.

The erratic approach, the petition argued, had resulted in the exclusion of large sections of the workforce, contrary to the object of providing social security to employees in the organised sector.

The plea submitted that the inconsistency has prevailed over revisions even though the Public Accounts Committee of the 16th Lok Sabha and the EPFO’s own Sub-Committee on Enhancing Coverage and Managing Related Litigation, in 2022, had recommended both periodic and rational revision of the ceiling.

“But despite approval by the Central Board (EPF) in July 2022, the Central Government has not acted upon these recommendations,” the plea highlighted.

It flagged two major problems—the absence of a prescribed timeline for regular revision of the wage ceiling under the EPFO and the arbitrary revision of the ceiling leading to “exclusion and reduction in the coverage of the scheme”.

The petition submitted that the inclusive framework of the scheme during the initial 30 years has changed into an exclusionary one in the past three decades.