The Union Cabinet chaired by Prime Minister Narendra Modi has approved the Ministry of Labour & Employment's proposal to enhance the wage ceiling for mandatory coverage under Employees' Provident Fund Organisation (EPFO) from ₹15,000 to ₹25,000 per month. This decision is expected to bring over 51 lakh additional employees within the ambit of mandatory EPFO coverage, significantly expanding social security protection for workers.
The enhancement updates the EPFO framework to reflect sustained wage growth, rising incomes, and continued expansion of formal employment since the last revision in September 2014. Employees joining employment at wages above ₹15,000 per month were previously excluded from automatic EPF coverage, but the new ₹25,000 ceiling will bring substantial segments in the ₹15,000-₹25,000 wage band under statutory social security.
The approval expands access to provident fund savings under EPF, pension protection under Employees' Pension Scheme (EPS), and insurance protection under Employees' Deposit Linked Insurance Scheme (EDLI). The measure strengthens formalization of employment, worker retention, and long-term retirement security while supporting workforce stability and morale.
The proposal underwent detailed inter-ministerial consultations and was recommended by the Expenditure Finance Committee on 16 June 2026. The government estimates an annual outgo of approximately ₹11,339 crore against the existing annual budgetary support of about ₹10,250 crore, with estimated expenditure over five years of approximately ₹56,696 crore.
EPFO currently operates one of the world's largest social security systems with approximately 7.98 crore contributing members across 7.68 lakh establishments, while EPS provides pension benefits to around 82 lakh pensioners. The Ministry of Labour & Employment and EPFO will undertake necessary statutory and administrative steps for implementation, advancing India's social security vision towards Viksit Bharat@2047.