Now soon small companies will be able to contribute towards provident fund, pension and insurance at one go. According to the report, the government may soon change the rules for this.
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Now soon small companies will be able to contribute towards provident fund, pension and insurance at one go. According to the report of Economic TimesThe government can soon change the rules for this. This step will make compliance easier for small units. At present, separate contributions have to be made for Employees’ Provident Fund Organization (EPFO) and Employees’ State Insurance Corporation (ESIC).
The proposal will be presented before the committee soon.
The proposal will be presented before a panel of experts for approval. According to the report, it has been said in the proposal that for units with 10 to 20 workers, a contribution of 10 to 12 percent can be fixed for insurance, provident fund, pension and other benefits. It has been said in the report that this information was given to him by an unknown government official. At present, preliminary talks are being held with the stakeholders at the level of EPFO and ESIC, so that the impact of this move on the employees and the employer can be calculated.
It has been said in the report that an expert committee will be constituted to arrive at the final rate in this matter. After this, the Ministry of Labor will issue a notification regarding this.
What are the current rules?
According to the Social Security Code, 2020, the government can create new schemes to increase coverage under different social security schemes. Apart from this, the government can allow changes in the existing scheme or by issuing notifications. Let us tell you that the employers contribute 3.25 percent of the salary to the ESIC fund, while the employees contribute 0.75 percent of the salary.
At present, organizations with 10 or more employees can contribute under the ESIC scheme for the insurance of their employees. With 20 or more workers, contributions have to be made for provident fund, pension and insurance benefits under EPFO. Apart from this, under EPFO, the Center is now considering reducing the limit of employees from 20 to 10. With the help of this, many small scale companies will be able to come under the ambit of EPFO. Under ESIC, the limit of number of employees for coverage is already 10 or more.