As per news report, The Ministry of Labour and Employment has clarified that Provident Fund (PF) contributions are voluntary for employees earning above ₹15,000 per month, as per the provisions of the Code on Social Security, replacing the previous 1952 legislation.
This revision impacts employees and employers under the Employees’ Provident Fund Organisation (EPFO).
According to the Labour Ministry, the latest Code on Social Security has replaced the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952.
Under this new framework, PF contributions are obligatory only for employees earning up to ₹15,000 per month. For those earning above this threshold, participation in the Provident Fund scheme is now on a voluntary basis unless required by the terms of employment.
Employers and employees may still mutually agree to continue contributing as per the existing PF norms, but this is no longer a statutory requirement beyond the salary limit. The contribution rate remains 12% for both employer and employee for those who opt-in.
In related developments, representatives from 5 organisations of the Employees’ Pension Scheme (EPS) under EPFO recently held discussions in New Delhi, highlighting the need to revise pension payouts.
Notably, attention was drawn to pensioners receiving amounts below ₹1,000, calling for a re-evaluation of such disbursements to ensure adequate post-retirement support.
This raising of demands aligns with concerns about the financial adequacy of retired contributors, particularly those within the lower wage segment of organised labour.
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The Code on Social Security, enacted to consolidate and simplify existing labour laws, has brought in multiple reforms including the restructuring of PF, Employee State Insurance (ESI), gratuity, and maternity benefits.
The flexibility of opting out of PF after ₹15,000 wages allows higher earners more control over their investment choices.
Employers are expected to align their compliance processes with the requirements under the new code. This structural change provides an option, not a mandate, for higher-wage earners concerning retirement savings under the EPFO umbrella.
The clarification from the Labour Ministry makes it official that PF contributions are only mandatory for salaries up to ₹15,000. Employees above this threshold now have the option to decide their participation, marking a shift from the previous mandate under the 1952 Act.
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Published on: Dec 15, 2025, 10:32 AM IST
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