Imphal, May 20: The Central Government has announced a notification on reduction of statutory rate of EPF contributions from 12% to 10% to the employers and employees of the establishment covered under EPF and MP Act, 1952 to provide relief to employees distressed by COVID-19 induced lockdown.
The reduction in contribution for wage months of May, June and July, is not applicable to establishments like Central and State Public Sector enterprises or any other establishment owned or controlled by or under control of the Central Govt or State Government. These establishments shall continue to contribute @ 12% of basic wages and dearness allowances, said the notice.
The reduced rate is also not applicable for PMGKY beneficiaries, since the entire employees EPF (12%) and employers' EPF and EPS (12%) contributions totalling 24% of the monthly wages is being contributed by the Central Government. It is intended to benefit both 4.3 crore employees and employers of 6.5 lakh establishments to tide over the immediate liquidity crisis to some extent, it informed.
It further went on to say that under the EPF Scheme, 1952 any member has the option to continue at a rate higher than statutory rate (10%) and employer can restrict his contribution @ 10% in respect of such employee.