Ministry of Labour & Employment revokes the requirement to contribute 1.16% of member’s salary to the provident fund

Ministry of Labour & Employment on 3 May, 2023 has revoked the requirement of the members to contribute at the rate of 1.16% of their salary to the provident fund. The Hon’ble Supreme Court, in its judgment dated 04.11.2022 in Employees Provident Fund Organization & Anr. etc. Vs. Sunil Kumar B. and Ors. held the requirement of the members to contribute at the rate of 1.16% of their salary to the extent such salary exceed Rs.15000/- per month as an additional contribution under the amended scheme to be ultra vires  of the provisions of the Employees’ Provident Fund and Miscellaneous Provisions Act,1952 (EPF & MP Act).

The Hon’ble Court directed the authorities to make necessary adjustments in the Scheme within a period of six months. 

Accordingly It has been decided to draw 1.16 % additional contribution from within the overall 12% of the contribution of the employers into the provident fund. This provision is retrospective in nature in line with the directions given by the Hon’ble Supreme Court. 

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