Supreme Court Steps on EPFO Wage Ceiling, Sets Deadline

The Supreme Court of India, on January 5, 2025, allowed a petitioner to submit a formal request to the Central Government asking for a review of “Wage Ceiling” under the Employees’ Provident Fund Organisation (EPFO).

A bench led by Justice J.K. Maheshwari gave academic and activist Naveen Prakash Nautiyal two weeks to file his request along with a copy of the court order. The court asked the Centre to decide on the issue within four months after that.

The court did not order a change to the wage cap but noted the concerns and set a clear time frame for the government to review the matter.

Wage Ceiling Freeze and Its Effect on Workers

The case focuses on the wage cap of ₹15,000 per month for EPFO coverage, which has stayed the same for many years despite major changes in pay levels across India.

The petitioner said that minimum wages set by the Central Government and several states are now higher than this limit. This creates a mismatch that keeps many workers from getting EPFO benefits.

Because of this, a large number of employees in the organized sector are left out of a key social security system meant to support them after retirement and during emergencies.

The petition said this goes against the purpose of the EPFO, which is to provide wide social security coverage for workers.

No Regular Review and Policy Gaps

The petition also pointed out that there is no fixed schedule or clear method for reviewing the EPFO wage cap. In the past, changes have happened at uneven intervals, sometimes after gaps of 13 or 14 years, and without clear links to factors like inflation, the consumer price index, per capita income, or current minimum wages.

This uneven method, the petition said, has slowly shifted the EPFO from a broad-based program in its early years to one that leaves out more workers over the last 30 years.

It also noted that the Public Accounts Committee of the 16th Lok Sabha and an EPFO sub-group on expanding coverage, in 2022, both called for regular and fair updates to the cap.

Even though the Central Board of Trustees approved this in July 2022, the Central Government has not acted so far, which led to the court stepping in to move the issue forward.

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