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EPF Notification reducing rate of contribution from 12% to 10%   May 19, 2020

The Ministry of Labour & Employment has issued a notification dated 18th May 2020 inserting the following entry aftter clause (iv) to Schedule II of the EPF ACt 1952
" “(v) Any establishment, other than Central Public Sector Enterprises and State Public Sector Enterprises and other establishments owned by, or under the control of the Central Government or the State Government, as the case may be, in respect of wages payable by it for the months of May, June and July, 2020”. 

Vide notification dated  9th April 1997 the Central Government had notified that the provsio for amending the rate of contribution in Section 6 will not apply to industries/establishments listed in Schedule II. Thus when the rate of contribution was enhanced from 10 to 12 percent from 1st May 1997 the four categories specified in Schedule II were to continue with 10%. Vide the present notification dated 18th May 2020 all establishments other than those specifed in item (v) have been added in Schedule. Hence all establishments which are covered under item (v) will be required to contribute @ 10%, both employers and employees share for May 2020, June, 2020 and July 2020.

The Ministry of Labour & Employment has issued a statement dated 19th May 2020 clarifying that where the wage structure is based on a CTC Model, the 2% share of employers contribution will have to be paid to the employee and cannot be retained by the employer.

Text of the Notifications dated 18th May 2020, 9th April 1997 and the Press Release dated 19th May 2020 is attached


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